US Regulators Explore 24/7 Financial Markets to Match Crypto's Pace

By: Eva Baxter

The United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have put forward a groundbreaking proposal aimed at modernizing the country's financial markets. The agencies unveiled a joint mission to realign traditional markets with the constantly operating crypto world by transitioning to a 24/7 trading schedule. This transformation, they suggest, could significantly enhance the capability and competitiveness of the U.S. financial market landscape in a globally connected, digital age.

In recent statements, the regulatory bodies highlighted the demand for round-the-clock trading across all asset classes that parallels the operational structure found in cryptocurrency markets. The shift to a continuous trading system could introduce a range of new opportunities while also presenting potential risks, especially for those markets traditionally accustomed to operating only during business hours. The agencies believe that such a move could stimulate innovation, drive efficiency, and address the growing need for regulatory updates in light of rapid technological advancements.

The proposed policy changes are also set to pioneer the rapid development of prediction markets and decentralized finance (DeFi) protocols within the U.S. These markets have increasingly gained traction due to their ability to offer financial derivatives and contracts that operate without traditional expiry dates through platforms like perpetual futures markets. By prioritizing regulatory clarity for these event contracts, the SEC and CFTC aim to provide more structured frameworks for implementing these advanced trading instruments, thus fostering a supportive environment for both investors and innovators alike.

Beyond aligning with the crypto sector's 24/7 activity, the regulators emphasize the significance of crafting comprehensive rules that support continuous innovation while safeguarding market integrity. As the agencies engage with industry stakeholders, their intention is to sculpt a robust market landscape that not only integrates with existing financial structures but also expands the U.S. markets' reach and resilience, echoing global trends in financial digitization.