Good afternoon.

It’s a pleasure to be here today at the U.S. Treasury Market Conference. I want to thank President John Williams and the New York Fed for inviting me to share my perspective before such a wonderful audience. 

It’s great to be back in New York City, the heartbeat of global financial markets. I spent over a decade in private practice here, and it’s the honor of a lifetime being able to speak today from the other side of the table as a public servant. 

Before I begin, I must note that the views I share today are my own as Chairman and don’t necessarily reflect those of the Commission.

When the U.S. derivatives markets are functioning well, they quietly perform two of the most important jobs in our economy: helping businesses hedge risk, which improves the allocation of capital, and facilitating price discovery, which allows markets to function efficiently and transparently. And there is no better example of this than in the U.S. Treasury market. 

The U.S. Treasury market is the foundation of the global financial system. It funds the U.S. government, provides the benchmark for interest rates throughout the economy, and serves as a critical source of liquidity and collateral. And it is one of the reasons why the U.S. dollar remains the world’s reserve currency. Simply put, the U.S. Treasury market is the envy of the world. 

Over the past twenty years, global derivatives markets have nearly doubled to $1.2 quadrillion notional, nearly half of which is overseen by the CFTC. Their growing importance is particularly evident in the Treasury market, where daily Treasury futures turnover has risen from roughly $200 billion to $900 billion during that same time period, while short-term interest rate futures such as SOFR have increased from roughly $2 trillion to $5 trillion. 

But the transformation is not simply one of scale. The financial architecture around the Treasury market has evolved alongside it. 

Repo and the cash-futures basis trade also now play a much larger role in financing, hedging and arbitrage. In 2006, related short term Treasury futures had roughly $10 trillion in open interest. Today, the similar short term U.S. interest-rate complex exceeds $60 trillion.

Alongside futures, the swaps market has expanded dramatically as well. USD interest-rate derivatives now average over $2 trillion in daily turnover, compared to roughly $300 billion a day in 2007. Overnight index swaps now represent a substantial share of that activity.

These numbers tell us something important: the Treasury market has not simply become larger. Its structure has changed.

Derivatives—including futures, options and swaps—are no longer simply instruments used to hedge positions in the cash Treasury market. They are part of the core market ecosystem—central to liquidity, risk transfer and increasingly to price discovery.

Today’s Treasury market is therefore fundamentally different from the market we knew two decades ago. And that means the CFTC must be different as well.

Our role can no longer be viewed simply through the lens of individual futures or swaps markets. 

The derivatives markets we oversee are now deeply interconnected with the cash Treasury market, repo, financing, and the broader Treasury ecosystem, and the CFTC sits at the center of these global financial markets.

This places an extraordinary responsibility on the agency. We need to regulate the marketplace as it function today, not as it functioned twenty years ago. That means better data, more integrated surveillance, a sharper focus on cross-market risks, and the ability to see how positions, leverage and liquidity interact across futures, swaps and cash markets.

The objective is not simply to regulate more. It is to regulate differently, with greater speed, greater precision, and a much more complete view of market structure. It will require a deeper understanding and assessments of these markets to detect vulnerabilities and risk and proactively working with our fellow agencies in protecting the deepest and most valuable marketplace in the world.

The CFTC, under my leadership, plans to embrace that change. As President Reagan once said, “the future doesn’t belong to the fainthearted; it belongs to the brave.” That has always been the American approach to innovation – embracing ideas, encouraging entrepreneurship, and building the markets of tomorrow. 

Today, we are entering another period of rapid transformation. Markets are increasingly operating across digital infrastructure through blockchain technology, stablecoins, and other innovative technologies. Trading continues to become faster, more automated, and increasingly global. And participants expect markets that are more accessible, more efficient, and in many cases, available on a continuous, 24/7 basis. 

What We’ve Done

At the CFTC, we are delivering on our mandate to ensure that our regulatory regime is purpose-fit today for the innovations of tomorrow. 

And the way we regulate these markets matters – not only to those trading in them – but to the broader strength and resilience of the American financial system. 

Since I rejoined the agency last December, the CFTC has taken meaningful steps to right-size regulation, reduce overburdensome and duplicative rules, and provide clear rules of the road for all market participants.

The Commission has worked diligently to advance Treasury market reforms and deliver on the SEC’s Treasury Clearing Mandate ahead of the December 31^st, 2026 deadline for cash Treasuries and the June 30^th, 2027 deadline for Treasury repo transactions. As the SEC’s Treasury clearing requirements bring more Treasury transactions into central clearing, market participants increasingly have positions spanning SEC- and CFTC-regulated clearing infrastructures.

Earlier this year, the CFTC, along with the SEC, approved exemptive orders allowing CME and FICC to expand their cross-margining arrangement beyond clearing members and to customers for Treasury securities and futures positions, allowing risk to be managed more holistically and reducing unnecessary margin costs for a broader swath of market participants.[1]

As part of this order, dually registered broker-dealers and futures commission merchants (FCMs) may now hold futures customer funds in a commingled customer account at FICC, resulting in reductions in required collateral while ensuring customer funds remain appropriately protected.[2] I have directed staff to make the necessary adjustments to our rulebook to permit FCMs to engage in cleared repo transactions involving customer funds ahead of the June 2027 Clearing Mandate deadline for Treasury repos. 

The Commission expects to see similar cross-margining programs submitted for regulatory approval from other clearing agencies, and I look forward to working with Chairman Atkins to ensure a smooth transition ahead of the “go live” dates in the coming months.   

In addition, as part of an unprecedented agency harmonization effort, the CFTC and SEC have sought public comment on ways to harmonize portfolio-margining frameworks.[3] Our joint request for comment on portfolio margining frameworks asks how the agencies can better recognize economically related positions and cross-product offsets, including across clearing organizations, rather than requiring market participants to maintain duplicative margin.[4] This work builds on our FICC-CME cross-margining efforts and demonstrates how CFTC-SEC harmonization can translate into more efficient clearing, lower collateral costs, and greater liquidity and resilience in the Treasury market.

Finally, as cross-margining programs continue to expand and risk profiles evolve, the CFTC is working alongside our interagency partners to ensure that the recent Basel III proposal’s capital requirements are appropriately tailored to actual risk, lower the cost of entry for businesses across the United States, and increase participation in derivatives markets. The agency will continue to consider what legacy capital, margin, or reporting rules should be amended to properly reflect the new Basel III proposal. 

Looking Ahead

However, in order to embrace innovation, we cannot simply modernize yesterday’s markets. We have to prepare for tomorrow’s. 

The work will not be easy, but preparing our markets for the new frontier of finance is imperative. This means readying our markets for mass tokenization, tailoring legacy frameworks so that innovative technologies, such as blockchains and artificial intelligence (“AI”), can be adopted at scale, and ensuring our market participants are prepared for the world of onchain finance and 24/7 markets. 

One of the most important innovations is the tokenization of real‑world assets. As I remarked earlier in my tenure as Chairman, high-quality tokenized collateral has the potential to make liquidity more dynamic and markets more resilient. 

It is easy to see how using blockchain technology and tokenized assets could become the foundation of a more efficient financial system – a financial system that I suspect many of you believe is long overdue for the 21^st century. It is one that enables near‑instantaneous settlement and real‑time collateral mobility across clearinghouses, intermediaries, and end users, all with the attributes of what makes America’s financial markets the gold standard. Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes.

As tokenization and onchain finance continue to evolve, the CFTC is committed to providing clear, principles-based rules to ensure that these innovations foster growth and preserve market integrity. Our goal is simple: digital technologies should make America’s markets more efficient, more resilient, and more competitive. 

To realize this goal, stablecoins will play an important role. Thanks to the leadership of President Trump, the GENIUS Act is now the law of the land, and the CFTC has been hard at work addressing stablecoins in our derivatives markets. Earlier this year, the agency expanded the list of eligible tokenized collateral to include certain payment stablecoins issued by national trust banks[5] and released a robust set of frequently asked questions,[6] which it continues to iterate on, concerning the use of tokenized collateral in our markets. Going forward, the Commission is committed to finding additional ways to encourage responsible stablecoin adoption for market participants, exchanges, and clearinghouses.

As our markets continue to globalize, and as advances in trading platforms, connectivity, and settlement technologies accelerate, the Commission has seen an increased interest around continuous, and 24/7 trading. Our derivatives markets serve participants in every time zone around the world, and the infrastructure supporting them is increasingly capable of operating around the clock.

Although many markets are moving toward continuous trading, that does not mean all markets are ready to make that change today. I have been clear that, under my leadership, the Commission will not take a one‑size‑fits‑all approach to 24/7 trading. Market structure evolves best through thoughtful and responsible progress, not by assuming that what works for one product or venue works universally. 

That is why the Commission sought public comment on the suitability of certain asset classes for 24/7 trading[7] and why CFTC staff issued an advisory on 24/7 trading, clearing, and settlement.[8] While certain asset classes, such as crypto or precious metals, may currently be suitable for 24/7 trading, others, like agricultural products, energy, and certain financials, may not.

A transition to broader trading hours must be done responsibly, grounded in a commitment to the agency’s mandate of fostering responsible innovation and promoting market integrity. The Commission’s role is to ensure our surveillance systems, margin frameworks, and operational safeguards are prepared to function continuously should the markets decide to move toward a 24/7 framework.

Our principles‑based approach remains our north star. The agency will support innovation that enhances resilience and competitiveness, while ensuring that any expanded trading hours promote the core functions of our derivatives markets.

Conclusion

The United States is the financial markets capital of the world. We have innovative firms, world-class exchanges, strong market participants, and now, regulators committed to promoting market integrity while supporting responsible innovation.

Those advantages will matter. With developments like tokenization, onchain finance, and 24/7 trading, the next decade will likely bring more change to financial markets than the previous several decades combined. If the question is, will the United States continue leading in these markets, then I say, yes, we will. Across the entire Trump Administration, we’ve already laid the groundwork to continue doing so by embracing innovation, encouraging competition, rightsizing regulation, and maintaining the trust that has made our markets the gold standard across the globe. 

Thank you again to the New York Fed for the warm welcome, and I’m looking forward to hearing more on some of these topics from our next panel.

[1] Order Providing Exemptive Relief to Facilitate Cross-Margining of Customer Positions Cleared at Chicago Mercantile Exchange, Inc. and Fixed Income Clearing Corporation, 91 Fed. Reg. 20880 (Apr. 20, 2026); Order Under Section 36 of the Securities Exchange Act of 1934 (the “Exchange Act”) Granting Conditional Exemptive Relief from Section 15(c)(3) of and Rule 15c-3 Under the Exchange Act for Cross-Margining of Cleared U.S. Treasury Securities and Related Futures, 91 Fed. Reg. 21035 (Apr. 20, 2026).

[2] Id.

[3] Joint Request for Comment on Further Implementation of Portfolio Margining and Cross-Margining of Securities and Derivatives, 91 Fed. Reg. 39579 (June 30, 2026).

[4] Id.

[5] Staff No-Action Position Regarding Digital Assets Accepted as Margin Collateral, CFTC Letter No. 26-05 (Feb. 6, 2026).

[6] CFTC Staff Issues FAQs Concerning Registrant and Registered Entity Activities Relating to Crypto Assets and Blockchain Technologies, CFTC (Mar. 20, 2026), https://www.cftc.gov/PressRoom/PressReleases/9200-26.

[7] Request for Comment on the Extension of Standard Futures Contracts to 24/7 Trading and on Perpetual Contracts Referencing Physically Delivered or Storable Energy Commodities, 91 Fed. Reg. 38334 (June 25, 2026).

[8] Staff Advisory for Extending Trading and/or Clearing Operations to a 24 hours-a-day, 7-days-a-week Basis, CFTC Letter No. 26-16 (May 29, 2026).

Good Morning, Bom dia, Tudu bem.

It is a great pleasure to join you for the fourth edition of Regulation Week, jointly organized by the Fundação Getulio Vargas Center for Law and Regulation in Rio de Janeiro and the George Washington University Regulatory Studies Center here in Washington, D.C.

For those I have not met, I am Mel Gunewardena, Director of International Affairs and Senior Markets Advisor to Chairman Mike Selig at the U.S. Commodity Futures Trading Commission.

The views I express today are my own and do not necessarily represent those of Chairman Selig or the Commission.

When I began my career at Goldman Sachs in 1994, markets were largely manual. Trading pits, hand signals, brokers, phones and handwritten tickets remained central to execution and price discovery.

Then markets moved to screens. Electronic trading broke down geographic barriers and computer networks helped move institutional trades from phones to electronic platforms. Options moved from pits and voice markets to screens. Markets became faster, more transparent and increasingly global.

The relationship between cash and derivatives also began to reverse. When I started, derivatives were largely priced from underlying cash markets. Today, across many of the world’s most important markets, derivatives increasingly drive price formation, price discovery and risk transfer. A simple lead-lag analysis demonstrates that Treasury futures lead price discovery in interest rates; WTI and Brent crude oil derivatives establish reference prices used throughout physical oil markets; and equity-index futures determine where cash equities reopen after overnight developments.

Global derivatives markets now exceed $1.2 quadrillion, and the CFTC oversees roughly $600 trillion across interest rates, equities, credit, currencies and commodities.

The next stage was the computer age. Mathematical models, expanding data and greater computing power moved markets from predominantly human execution toward algorithmic strategies operating across asset classes and geographies.

We are now entering another stage: markets that are not merely electronic or algorithmic, but increasingly continuous, programmable, composable and autonomous.

In 2017, during President Trump’s first term, the CFTC became the first regulator in the world to establish regulated crypto asset derivatives markets, with the launch of bitcoin futures.

Today, under President Trump, the United States is leading the next transformation. The GENIUS Act has established a federal framework for payment stablecoins, while the CLARITY Act is advancing a broader framework for crypto asset markets.

At the CFTC, Chairman Selig is translating that leadership into global derivatives markets—bringing innovation onshore and adapting the agency’s framework to a fundamentally different market architecture. The Commission approved the first “true” onchain perpetual futures contract, set expectations for 24/7 trading, clearing and settlement, and began putting rules in place for prediction markets.

The global financial markets are moving toward programmable and composable financial assets, continuous settlement and machine-executable infrastructure.

Tokenized securities, commodities, funds and collateral can operate alongside stablecoins and tokenized deposits. Smart contracts, atomic delivery-versus-payment, oracle networks, cryptographic attestations and cross-chain interoperability could transform how liquidity, collateral and risk move through the global financial system.

AI is also transforming who—or what—trades these markets. When I began at Goldman Sachs in 1994, Fischer Black was still at the firm, and the Black-Scholes model he developed with Myron Scholes remained the gold standard for modern quantitative finance. It applied probability and stochastic mathematics to the pricing of uncertainty.

The next generation used statistical models and greater computing power to identify relationships across markets and execute algorithmically. I saw that progression firsthand while covering Renaissance Technologies, then at the frontier of model-driven trading.

Today, artificial intelligence and large language models are taking it further—from models governed by predefined rules toward systems capable of interpreting unstructured information, reasoning across multiple inputs, making decisions and increasingly acting autonomously.

These are not separate developments. A tokenized asset can trade continuously, settle through a stablecoin, rely on smart contracts and oracle networks, reference a traditional derivatives benchmark, move across interoperable protocols and ultimately be traded by an autonomous AI system.

Collateral that was once valued and moved periodically can be revalued, pledged, released and rehypothecated in real time. Smart contracts can automatically adjust margin, liquidate positions and redirect collateral across interconnected markets and protocols. This may reduce settlement risk and improve capital efficiency, but it can also accelerate procyclicality, trigger cascading liquidations and transmit risk across markets before either regulators or market participants can intervene.

This convergence could make markets more efficient, expand access to capital and create new ways to transfer risk. But it could also fundamentally reshape the speed, scale and channels through which prices and risk moves across products, platforms and jurisdictions.

But this structural transformation represents a major and growing gap in the international regulatory agenda. International regulation remains organized around individual institutions, products and technologies while the market itself is becoming integrated, continuous and increasingly autonomous.

Much of the international regulatory architecture was built for markets with identifiable products, institutions and jurisdictions; defined trading hours; distinct trading, clearing and settlement functions; and ultimately, human decision-making.

Those assumptions are breaking down.

Markets may remain legally separated by jurisdiction, venue and product, but economically they are increasingly interconnected. 

A Brent-linked contract trading on an online platform in Singapore can affect Brent in London and transmit into WTI in the United States. Volatility in a Korean equity can be amplified through an onchain derivatives platform operating from the British Virgin Islands and transmitted back into Korea.

The jurisdictions may be different. The venues may be different. The products may be different. Economically, they are part of the same market.

For example, a technology interface in one jurisdiction may be a gateway to a global derivatives market, with liquidity, leverage and risk distributed across an onchain ecosystem. Regulators should understand the economic market behind the interface, not simply the entity inside their legal perimeter.

As markets are increasingly interconnected, I notice four important gaps across the various international standard setting work and the various bilateral regulatory work undertaken by international regulators

The first is supervisory cooperation.

Many regulatory Memoranda of Understanding and supervisory cooperation agreements were designed for technical cooperation and information sharing. They were not built for markets capable of transmitting risk across jurisdictions in seconds, and many lack clear requirements for market disruption, cyber incidents, infrastructure failures, liquidity stress, defaults and timely supervisory notification.

Information sharing after something has gone wrong is not crisis management. Modern supervisory cooperation requires early notification, real-time coordination and clear responsibility before and during market stress.

The second gap is financial-stability oversight.

The international financial stability architecture remains heavily weighted toward central banks and cash-securities regulators, including jurisdictions with limited derivatives markets. Derivatives regulators and experts overseeing the markets where global price discovery and risk transfer increasingly occur remain underrepresented.

That imbalance shapes the analysis.

Non-bank credit illustrates the problem. Years have been spent pursuing hypothetical risks that have not materialized, while structural changes in AI, tokenization, new products and derivatives have been examined too often as isolated workstreams rather than as interacting components of a changing market structure.

The result is product analysis rather than systemic analysis, frequently driven by what has already entered the news cycle. Examined separately, these developments can appear novel but contained. Viewed together, they reveal how leverage, positioning, concentration, collateral and liquidity connect markets and transmit and amplify risk across the financial system.

Financial stability cannot be understood solely from economic statistics, balance sheets and cash markets—or from yesterday’s headlines in The Wall Street Journal. By the time a vulnerability becomes front-page news, it is no longer a warning. It is an event.

Understanding that risk requires derivatives expertise, market-level data, a practical understanding of how markets operate and a holistic view of the financial system. Without them, the system is structured to understand the next crisis only after it arrives.

That is not forward-looking financial stability oversight. It is institutionalized crisis management.

The third gap is global standard-setting governance.

Authorities come to the table with vastly different markets, expertise and access to information. Yet leadership and representation can reflect geography, institutional convention and established relationships rather than market scale, expertise, data and responsibility for the risks being supervised.

Consensus and cooperation then become a substitute for judgment. The objective becomes finding what everyone can agree to rather than identifying what global markets require. The result can be lowest-common-denominator regulation, comfortable, broadly acceptable and behind the risk before a standard is published.

A global market standard setter cannot operate like a diplomatic institution. Market relevance, expertise and risk—not convention—should determine who leads, what gets prioritized and how standards are shaped.

It should not be controversial to expect an institution that sets governance standards to practice good governance itself—or one that sets global standards to focus on the most consequential global risks.

If that sounds like a high standard, it should. Standard setters, of all institutions, should not be afraid of one.

The fourth gap is in our market safeguards.

Much of today’s framework was built for the computer age—fat-finger trades, erroneous orders, computer glitches and algorithmic disruptions. Price limits, and circuit breakers were designed for those risks.

But the next disruption could come from autonomous systems functioning exactly as designed. It could begin in an unsupervised market trading through a weekend or overnight, when liquidity is thin and traditional markets are closed, establishing prices that are transmitted into regulated markets when they reopen.

The market may be closed. Price discovery is not.

Our current markets safeguards were not designed for markets that are autonomous, decentralized,  and continuous.

These gaps cannot be addressed retrospectively. Regulators must understand the technology, anticipate the new risk topology created by composability, interoperability and automated execution, and establish coherent standards that permit responsible innovation while protecting markets.

The greatest regulatory risk may no longer be simply that markets move outside the regulatory perimeter.

It may be that the regulatory perimeter itself no longer describes the market.

At the CFTC, under Chairman Selig, the agency is reviewing the architecture through which foreign markets and institutions access the United States and the cross-border arrangements supporting that access.

Participation in the world’s deepest financial markets should be supported by modern supervisory arrangements that protect customers and market integrity while addressing financial stability, economic and national security risks.

International cooperation therefore becomes more important, not less. But it must evolve with the markets it is intended to govern.

The choice is not between innovation and regulation. It is whether innovation develops within deep, transparent and well-regulated markets—or beyond the reach of frameworks that were too slow to understand it.

The next generation of markets is already being built: assets that are programmable, infrastructure that is composable, trading that is continuous and participants that are increasingly autonomous.

Capital is already moving through this architecture. Price discovery is already occurring within it. And risk will move through it faster than our institutions unless regulation evolves.

Markets will not wait for regulation to catch up.

The defining regulatory question of the next decade is therefore not whether these markets will emerge. It is whether those responsible for protecting the global financial system will understand them early enough to shape them.

The United States has repeatedly led the world through transformations in market structure—from manual markets to electronic markets, to the computer age.

Today, as global markets stand at the threshold of another great transformation, we again have both an opportunity and a responsibility.

Under the leadership of Chairman Selig, and with responsibility for roughly half of the $1.2 quadrillion global derivatives market, the CFTC will help lead this transformation.

Because the future of markets will be shaped by those who recognize the opportunity, understand the risks and have the vision to realize its extraordinary benefits.

Thank you. Good afternoon and welcome to the Innovation Advisory Committee’s inaugural meeting.

We’ve assembled some of America’s greatest builders, thinkers, and entrepreneurs here in our nation’s capital to engage in a series of conversations about where our financial markets are headed, and what role America, and, in particular, the Commodity Futures Trading Commission (“CFTC”), will play in shaping that future.

Before we get started, I’d like to take a step back and discuss why American leadership on this new frontier of finance matters. But, before I do, I must provide the standard disclaimer that the views I express here today are my own as Chairman and don’t necessarily reflect those of the Commission.

Built for the Frontier

For more than half a century, the CFTC has stood at the center of innovation in America’s financial markets, helping ensure that innovation can flourish while markets remain fair and resilient.

When President Gerald Ford signed the Commodity Futures Trading Commission Act into law in 1974, America’s derivatives markets were being transformed by an explosion of interest in a wide range of novel instruments – from contracts on currencies, to petroleum allocations, to Ginnie Mae certificates.[1]

Despite federally regulated commodity exchanges having existed since the 1920s, prior law only covered contracts in an enumerated list of agricultural commodities, like wheat, corn, cotton, and rice. The balance of contracts was subject to the same patchwork of state laws that had prompted Congress to institute federal commodity laws in the first place. As a result, America was falling behind.

The history of America’s earliest commodity exchange, the Chicago Board of Trade, has been described as a saga of “fending off countless politicians on both the state and national level, all of which seemed intent on shutting the Board down.”[2] In 1848, a group of merchants established the Board above a flour store to enforce a set of codes and rules for buying, weighing, and grading commodities and to arbitrate disputes among traders.[3]

By 1859, a convention emerged whereby parties who had committed to buy or to sell a commodity could make or receive a payment to or from the other party based on the change in price of the commodity instead of making or taking physical delivery.[4] They standardized a promise – a measure of grain, a price, a date – so that a farmer hundreds of miles away could lock in her season before the first frost, and so that a miller could plan his year without relying solely on hope to make ends meet. These arrangements came to be known as futures contracts.

The response to this innovation in the markets was remarkably similar to what we have seen with some of the technologies we’re here to discuss today. As these early markets began to take shape, state lawmakers across the country moved to subject these exchanges to a wide range of state “anti-gaming” and “anti-bucket shop” laws.[5] One lawmaker urged federal action, exclaiming that “[t]he grain gamblers have made the exchange building in Chicago the world’s greatest gambling house.”[6] Karl Marx called exchanges “gambling” parlors “where little fish are swallowed by the sharks.”[7]

The same rhetoric has been used to delegitimize and undermine our markets for more than a century.

But when lawmakers considered legislation to amend the Commodity Exchange Act (the “CEA”) and codify, once and for all, a comprehensive federal regulatory framework for commodity exchanges, they recognized then what we know to be true today: regulation and innovation must go hand in hand. Without clear rules of the road, builders, visionaries, and entrepreneurs always leave for brighter shores.

So, Congress established a federal system of market regulation designed to be future-proof. It created a new federal agency – the CFTC – and provided it with “exclusive jurisdiction”[8] over commodity derivatives markets. Lawmakers also included a statutory mandate that the agency “promote responsible innovation.”[9]

Recognizing that virtually anything,[10] tangible or intangible, might serve as the underlying for a derivative contract, lawmakers defined the term “commodity” to include “all goods and articles, . . . and services, rights, and interests” that may be the subject of a derivative contract.[11] This included events, contingencies, and incidents that take place which are beyond the control of the contracting parties.[12] With an “essentially unbounded field of potential commodities,”[13] exchanges were free to innovate and offer a wide range of novel financial instruments under a single federal regulatory framework.

The breadth of this definition makes clear that lawmakers intentionally chose not to fragment regulatory authority over commodity derivatives markets based upon the underlying commodity. They reasoned that “[t]he nature of the underlying commodity is not an adequate basis to divide regulatory authority.”[14] Instead, lawmakers opted for simplicity and ease of administration, explaining that “the fact that a futures contract market does not fit into the traditional mold where there are both hedging and price-discovery functions should not be the determining factor in whether the contract is regulated by the CFTC.”[15]

These contracts were now required to trade on CFTC-registered exchanges, known as designated contract markets (or “DCMs”). DCMs would be overseen by the CFTC but also operate as self-regulatory organizations that would serve as the first line of defense in policing rules to protect market integrity. The patchwork of state laws that once undermined the ability of exchanges to operate across the country would no longer apply to these federally regulated exchanges.

With clear rules of the road, pioneering exchange operators set out onto the vast frontier of finance and designed many of the contracts that are popularly traded today, like weather, interest rate, and equity derivatives.

After observing the evolution of these markets under CFTC supervision for some decades, Congress made additional modifications to the CEA to further future-proof the framework with the Commodity Futures Modernization Act of 2000 (the “CFMA”). We’re pleased to have with us today former CFTC Acting Chairman, Walt Lukken, who was heavily involved in the development of the legislation as an advisor to the then Senate Agriculture Committee Chairman, Richard Lugar.

The CFMA replaced the CEA’s legacy system of prescriptive regulation with a principles-based regulatory framework. The regime afforded market participants the flexibility to operate within core principles so that their ability to innovate is not constrained by hard rules.[16]

More recently, Congress again amended the CEA under the Dodd-Frank Act to expand the agency’s authority to more comprehensively cover the universe of swaps. Lawmakers also chose to include within the CFTC’s jurisdiction offerings of commodity transactions on a margined, leveraged, or financed basis to retail participants, which must trade on a DCM as futures.

The results of these developments are reflected by the sheer size and depth of our derivatives markets. At the time that the Commodity Futures Trading Act was enacted in 1974, the U.S. derivatives market was valued in the low hundreds of billions of dollars notional. Today, the CFTC regulates approximately half of the $1.2 quadrillion notional global derivatives market.[17] This is not an accident. It is the result of American regulation keeping pace with American innovation.

But unfortunately, our history reflects that, at times, we’ve lost our way. Commodity options were prohibited in the U.S. until 1974 due to concerns that the contracts were instruments of manipulation and destabilizing speculation.[18] And there’s been a lot of debate about Congress’ decision to ban onion contracts in the Onion Futures Act of 1958,[19] as well as the movie box office revenue contract prohibition that found its way into the 2008 financial crisis reforms.[20]

* * *

Today, we’re once again at an inflection point. Another moment when the choices we make will shape the markets and opportunities of the decades ahead.

We’ve crossed the Rubicon and are standing at a new frontier of finance. It’s not a question of whether innovations like blockchain, artificial intelligence, and prediction markets will transform our markets. It’s a question of where this innovation will take place and who will write the rules.

America can either accelerate and continue the regulatory tradition that made our markets the greatest on Earth, or it can decelerate and let other countries take the lead. We can be optimistic about the future. Or we can fear it.

In this administration, we are choosing to lead. Under President Trump’s leadership, America will not simply participate in this new frontier of finance. We will shape it.

Today, I’ll preview our innovation agenda, or what I refer to as the “Roadmap for the New Frontier of Finance” (or “Roadmap”).

Setting the Standard: Roadmap for the Crypto Capital of the World

During the prior administration, the American crypto industry weathered a perfect storm of anti-crypto armies, de-banking, regulation by enforcement, and offshore exchange failures. After taking the oath of office on January 20, 2025, President Trump quickly followed through on his commitment to “fire Gary Gensler” and make the United States the “crypto capital” of the world.[21]

Under the prior regime of regulation by enforcement, businesses could not know in advance whether their actions were legal or illegal, whether they were guilty or innocent, because there were no clear rules on the books.

Many of you in this room today were victims of this wayward approach to regulation. You built companies, created jobs, invested capital, and tried to comply with the law, only to find yourselves navigating a regulatory system where the rules could change after the fact. This is the type of persecution we see in banana republics. It’s unacceptable in the United States.

That’s why I partnered with Chairman Atkins at the Securities and Exchange Commission on Project Crypto to codify a clear taxonomy for crypto assets that provides certainty to the marketplace as to which types of crypto assets are securities, and which are not.

I remain hopeful that Congress will deliver to the President’s desk bipartisan crypto asset market structure legislation that codifies this jurisdictional line and establishes statutory core principles for crypto asset spot markets. While we have other tools in the box if the bill doesn’t pass, I want to be crystal clear: the most important step towards future-proofing this industry is passing this bipartisan bill.

Passing CLARITY is the surest way that we can prevent another Gary Gensler from running a rogue campaign of lawfare against the individuals and companies in this room. I’d urge you all to continue engaging with Capitol Hill to ensure that this bill gets across the finish line. We stand ready to begin immediately implementing the bill if passed.

If CLARITY continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets. We owe it to the American people to do so. 

President Trump promised to deliver a crypto asset market structure, and we will help him deliver if Congress will not.

We will heed President Trump’s call to “codify a future-proof digital asset market structure that cannot be undone by the crypto haters.”[22]

To achieve this, I’ve directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency’s existing authorities. This could enable current registrants as well as non-registrant crypto exchanges to be designated by the CFTC as a type of DCM known as a crypto asset market and offer crypto asset trading on a leveraged or margined basis subject to purpose-fit rules under the CFTC’s regulatory oversight.

I’ve also directed staff to engage with developers of onchain finance protocols to establish ways in which developers can offer their protocols in a legal and compliant manner in the United States. Future-proofing developer protections once and for all.

We’re going to give CLARITY its breathing room for a vote, but if the Democrats cannot support a bipartisan work product, which reflects compromises from both sides of the aisle, and ultimately send a fair version of the bill to the President’s desk, then rest assured, I will direct CFTC staff to move swiftly to propose these new rules for the industry.

Winning the AI Race: Roadmap for Compute Market Dominance

Now, as President Trump said, “America is the country that started the AI race. And . . .  America is going to win it.”[23]

Access to advanced GPU clusters and compute capacity increasingly determines who can compete, who can innovate, and ultimately, who can lead. As demand for compute grows, so too does the need for markets capable of efficiently allocating scarce resources and managing risk.

If the lessons of history are any guide, well-functioning spot, forward, and derivatives markets emerge in conjunction with demand for scarce and economically significant commodities. Compute is proving to be no different. Transparent markets can transform compute from a costly and unpredictable input into a commodity with reliable price discovery and effective hedging, which will strengthen America’s capacity to lead the AI revolution.

America’s AI Action Plan calls upon the federal agencies to ensure access to large-scale compute for startups and academics by improving the financial market for this ever-critical digital commodity.[24]

And we’re partnering with the Department of Commerce to get this done. Our first step was to issue a request for comment on compute markets, which was released earlier this week. From there, we’ll take stakeholder feedback into consideration and develop a gold standard regulatory framework for these new commodity markets.

Just as American markets helped establish the gold standard for trading the commodities that powered the industrial economy, we will do the same for the commodity that will power the intelligence economy.

Forecasting the Future: Roadmap for American Prediction Markets

Today, prediction markets find themselves enduring the same type of assault from state and national politicians that plagued the Chicago Board of Trade for much of its early existence. Although Congress gave the CFTC the exclusive authority to regulate DCMs that offer trading in derivatives, many states seek to nullify federal law and apply state anti-gaming laws to DCMs.

These state actors are sadly suffering from what the late CFTC Chairman Philip McBride Johnson called NFS, or Name Fixation Syndrome. NFS, he explained, “is an intellectual malady that causes the listener to hear only the first part of a phrase, such as TREASURY BOND futures, SOYBEAN futures, OIL futures, [SPORTS futures,] etc. Without treatment, this can lead the patient to think that the futures should be regulated by the same agency that supervises the NAME. The consequences, of course, are preposterous.”[25]

I’m happy to report that we are not afflicted with NFS here at the CFTC. That’s why we’ll continue to promote responsible innovation in lawful derivatives and defend our exclusive jurisdiction in court. As President Trump said, “[o]ther countries are after this new form of financial market, and we want to remain at the top.”[26]

But we’ll not only defend our jurisdiction, we’ll also exercise it by establishing clear rules of the road for these markets.

Despite what some diagnosed with NFS may have you believe, prediction markets aren’t new. Our statute expressly classifies as commodities events, contingencies, or incidents that take place which are beyond the control of the contracting parties.[27] Derivatives on these commodities are known as “event contracts” and they have traded in our markets for decades.

Yet, the CFTC never instituted a comprehensive regulatory framework to address the unique policy considerations associated with these products. Instead, prior administrations put their heads in the sand, thinking that the markets would go away, and, when that failed, tried to outlaw the products entirely. We witnessed the same story that we did with commodity options and crypto assets unfold with event contracts – regulators tried to ban them and drove the innovators offshore to places like the Bahamas. We all know how this story ends.

We’re not going to take this approach anymore at the CFTC. Here’s our Roadmap for prediction markets:

First, we recently proposed amendments to CFTC Rule 40.11. While every event contract must satisfy the core principles and not be readily susceptible to manipulation, Congress recognized that certain types of event contracts, specifically those involving war, terrorism, assassination, gaming, and illegal activities, raise additional public policy considerations. The CFTC has the discretion to prohibit any such contract when doing so is in the public interest.[28]

However, our statute does not define key terms like “gaming” or “involve” or establish public interest criteria for us to consider. As a result, contracts are at risk of rejection based upon arbitrary whims or political biases, and DCMs have been left operating in the dark.

The prior administration attempted to prohibit event contracts on politics, sports, and cultural events in the name of the public interest – without ever defining what is in the “public interest.” Under this approach, the public is not the judge of its interest but instead whoever is in control of the Commission.

Our proposed amendments to CFTC Rule 40.11 are intended to address these issues by defining key terms and enumerating public interest criteria for Commission consideration.

Second, we proposed a rule to modernize the reporting framework for fully collateralized event contracts. The proposal would establish a durable regulatory framework that provides the Commission with the information it needs to oversee these markets while eliminating unnecessary complexity and regulatory burden.

Finally, I expect the Commission will soon propose a series of amendments to Parts 38 and 40 of the CFTC’s regulations to modernize the core principles and listing rules governing DCMs that list event contracts and institute consumer protection requirements. We’ve heard the concerns of public commenters about inadequate consumer protections for retail loud and clear. These amendments would also establish clear expectations for product governance, market design, and incentive programs.

* * *

We have a lot of work ahead of us at the CFTC. But we’re energized by the innovation happening in our markets. Due, in large part, to the ingenuity of you all in the room today.

You’ve withstood anti-crypto armies, doomerism, and a lot of subpoenas. But you continued to build and innovate here in the United States.

That’s why we asked you all to be a part of the very first Innovation Advisory Committee. To bring together the people building and innovating in the United States and ensure that the new frontier of finance remains on American soil.

Thank you all for your service. I look forward to today’s discussions.

[1] Philip McBride Johnson, Thomas Lee Hazen, Susan C. Ervin, Charles R. Mills & Kathryn M. Trkla, Derivatives Regulation §2.03 (Second Edition 2004).

[2] Joh H. Stassen, The Commodity Exchange Act In Perspective: A Short and Not So-Reverent History of Futures Trading in the United States, 39 Wash. & Lee L. Rev. 825 (1982).

[3] Id.

[4] Johnson and Hazen, supra note 1, at §2.02.

[5] Id.

[6] 61 Cong. Rec. 4761, 4763 (Aug. 9, 1921) (remarks of Sen. Capper).

[7] 3 Karl Marx, Capital: A Critique of Political Economy 440 (Friedrich Engels ed., Progress Publishers 1959) (1894).

[8] 7 U.S.C. § 2(a)(1)(A).

[9] 7 U.S.C. § 5(b).

[10] “Even the SEC envied the CFTC—or soon envied it. Congress buried among the 1974 amendments to the Commodity Exchange Act an expanded definition of the term ‘commodity’ to include literally anything, with one exception [for onions], which was or might In the future be the subject of futures trading.” Stassen, supra, note 2, at 833-34.

[11] See Johnson and Hazen, supra note 1, at §2.03.

[12] See 7 U.S. Code § 1a(19)(iv) (defining “excluded commodity” to include “an occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or level of a commodity”).

[13] See Johnson and Hazen, supra note 1, at §2.03.

[14] Report on S. 2391 of the Senate Agriculture, Nutrition, and Forestry Committee, S. Rep. No. 95-850, 95th Cong., 2d Sess. 22-23 (May 15, 1978).

[15] Id.

[16] See Heath P. Tarbert, Rules for Principles and Principles for Rules: Tools for Crafting Sound Financial Regulation, Harvard Business Law Review, Vol. 10 (2019–2020), Harvard Business School, 2020.

[17] See Michael S. Selig, The New Era of Finance Needs Innovation More Than Consensus, The Economist (Aug. 6, 2026), available at https://www.economist.com/by-invitation/2026/08/06/the-new-era-of-finance-needs-innovation-more-than-consensus.

[18] See Jerry W. Markham, The History of Commodity Futures Trading and its Regulation (1987).

[19] See, e.g., Roger W. Gray, Onions Revisited, 45 J. Farm Econ. 273 (1963).

[20] See, e.g., Paul G. Anderson, Note, Back to the Future(s): A Critical Look at the Film Futures Ban, 29 Cardozo Arts & Ent. L.J. 179 (2011).

[21] Donald J. Trump, Keynote Address at the Bitcoin 2024 Conference, Nashville, Tenn. (July 27, 2024).

[22] Donald J. Trump, @RealDonaldTrump on Truth Social (May 27, 2026).

[23] Donald J. Trump, President Trump Speaks at Artificial Intelligence Summit, Washington, D.C. (July 23, 2025).

[24] See The White House, Winning the Race: America’s AI Action Plan (Jul. 23, 2025), available at: https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf.

[25] Johnson and Hazen, supra note 1, at §4.05.

[26] Donald J. Trump, @RealDonaldTrump on Truth Social (May 26, 2026).

[27] See 7 U.S.C. § 1a(19)(iv) (defining “excluded commodity” to include “an occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or level of a commodity”).

[28] See 7 U.S.C. § 7a-2(c)(5)(C).

Thank you, Mr. President. It’s an honor to be here with you and this exceptional group of business leaders.

Thanks to your leadership, the era of political lawfare, de-banking, and regulation by enforcement is over. Innovators like the people in this room are welcomed to the White House, not railroaded to the big house. And the new frontier of finance is being built right here on American soil.

From day one, this President has been clear: America will not fall behind and allow other countries to take its position as the greatest place on Earth to build a new technology, operate a business, and invest for the future. The world will run “on the backbone of American technology.”

Under President Trump’s leadership, we’ve codified the GENIUS Act, established a strategic bitcoin reserve, drawn a clear line in the sand between crypto securities and commodities, launched the first U.S. crypto perpetual, and protected the rights of software developers.

We’ve exiled Gary Gensler, defeated the anti-crypto army, and made America the crypto capital of the world. 

And I’m proud to be working with Secretary Lutnick and the Department of Commerce to make America the compute capital of the world. This may be the most important commodity of our time – some are even calling it digital oil. And America needs to dominate these markets to win the AI Race.

We’ve also protected federally regulated prediction markets from rogue state attorneys general like Letitia James who seek to nullify federal law and push these financial markets offshore – to unregulated and foreign venues.

American dominance in the technologies that will define the future remains unmatched. We are truly in a Golden Age of American Innovation.

Now, the United States has a choice. We can either write the rules that define the next generation of financial markets, or we can let other countries write them for us.

With Congress advancing the CLARITY Act towards the finish line, we stand ready to implement the bill once it’s been signed by the President. But we’ll use every tool available to move the President’s pro-innovation agenda forward in the meantime.

Tomorrow, at the inaugural meeting of the CFTC’s Innovation Advisory Committee, I look forward to sharing more details on our regulatory roadmap for the new frontier of finance. A path forward that provides greater certainty for innovators while reinforcing confidence in our markets for decades to come.

This President has assembled an extraordinary team of entrepreneurs, builders, investors, and business leaders serving and advising in government, like David Sacks here. This real-world experience has already brought valuable perspectives into policymaking, and it will continue to pay dividends to the American people.

Innovation depends on regulatory clarity. Clear rules create confidence. Confidence attracts investment. And investment creates jobs, strengthens our markets, and keeps the world’s best talent building here in America.

Mr. President, thank you again for your leadership and for making American innovation great again. The work we’re doing now will shape the future of our great nation for decades to come.

Now, I’m honored to introduce the most pro-innovation, pro-free market SEC Chairman in America’s history, and what an upgrade from Gary Gensler, Paul Atkins. Mr. Chairman, please.