Perps Are Coming Onshore | CFTC Chairman Mike Selig

**Mike Selig** (0:00)
But we're excited to make sure that the new frontier finance is built here in the US., and that means new products, new services, new platforms, and we can't fear that. We have to embrace it and come up with a pathway for it, because in my view, if we erect barriers, if we push this activity offshore, it will go offshore, and it's not gonna benefit the American people because they're gonna go use a VPN and access it anyway, and they have none of the protections. So if we can come up with a path for the United States, we're gonna do it, and we're gonna certainly work on it.

**David** (0:33)
Bankless Nation, I am once again joined by Mike Selig. He is the CFTC chairman back on Bankless. Mike, great to have you.

**Mike Selig** (0:39)
Glad to be here.

**David** (0:40)
Two weeks ago, the CFTC announced the order for approval to Kalshi X for the listing of the BTC PERP contract. This is a pretty big landmark for the perpetual as an instrument. It's also the first onshore US. Bitcoin perpetual futures contract from a CFTC registered exchange. At the same time, the CFTC also gave Coinbase a no action letter allowing them to pipe their customers to Deribit in order to access futures options and PERPs on Coinbase access through Deribit. Pretty landmark approval.
Mike, are we about to see more of these? Is the CFTC opening up the gate for onshore PERPs? What can we expect as an industry or people who are just interested in the perpetual future instrument?

**Mike Selig** (1:27)
Well, thanks for having me on the show. And this is really, as you say, a watershed moment, a pivotal moment, where we've turned the tide on the years of regulation by enforcement, a lack of clear rules, kind of this offshoring, pushing things out of the country. And we want it to be here in the United States. We want the industry to survive, to thrive and to build here in the US. And part of that means having a futures market, having perpetual contracts that are tradable on US exchanges, under US regulation, on US soil, and not something that you have to go use a VPN to be able to figure out how to trade. So that starts with exchanges like Kalshi, exchanges like Coinbase. And there's a long list of others who will be launching the product soon. We started off with this initial order for a Bitcoin perpetual contract that was listed on Kalshi's exchange. And we also approved the ability to access through Coinbase's broker offshore perpetual contracts. And all these are regulated products. And that's really the theme here. This administration cares about regulation, but we also care about innovation. So we are opening the doors to new products. And we think this is the beginning. It's certainly not the end. There's many more crypto and other types of products that people want to offer here in the US that for so long have existed only offshore. So this is the beginning and not the end for sure.

**David** (2:50)
The beginning and not the end. And I think that's why people in my neck of the woods are just so excited. Perps as an instrument, as you know, Perps platforms, incredibly successful as an adoption metric. So like just the adoption of the Perp has gone incredibly well and Perps platforms are just generating some of the greatest profits out of crypto that we've seen. And so this is why people are excited. You know, first we can start with Bitcoin, but we have a whole industry of assets that we would like to Perpify, maybe in the same way that we had the ETFs. You know, first we started with Bitcoin and then Ether came, and then there are even more ETFs. Is that something that's going to happen with Perps as well?

**Mike Selig** (3:32)
Well, one important point is just in the week since we saw the green lighting of the Bitcoin perpetual contract, we've now seen a number of products self-certified as perpetual contracts in the digital commodity world. So, we break down at the SEC and CFTC crypto assets using clear rules unlike the last administration, the crypto assets in the category. So, we have digital commodities, and these are assets that derive their value from a network or protocol or an application. Things like Bitcoin, Ethereum, Solana, Uniswap's token, these types of tokens that derive value from a network or product or application. All of those products with certain requirements around the product being listed, the products have to have a ready market, have to be not readily susceptible to manipulation, and so on and so forth. But provided that the contract meets our requirements, those can be self-certified. That means that the exchange can list those products without having to ask for permission first. They can essentially submit them and we can reject the contract if we believe there's an issue with our regulations. But they can be listed fairly easily. So we've seen a number of those be listed in the past week. We expect to see more in the future. But then moving into other categories, digital collectibles, for example, meme coins, those sorts of assets, we would expect a process with the staff. We want those to go through a full approval with the CFTC, and then moving into things beyond crypto, equities, which we can certainly get into, metals, other types of products.