Former US regulatory officials believe that a shift toward less restrictive oversight of crypto perpetuals (perps) and custody is essential to repatriate the $90 trillion derivatives market. By streamlining compliance requirements and offering a more permissive framework for derivatives trading, the US could provide a safe, regulated alternative to offshore exchanges. Currently, the lack of clear federal legislation like the Clarity Act has left the SEC and CFTC to lead with a heavy-handed approach that many industry experts say stifles domestic innovation.
The $90 trillion figure represents the massive scale of the global perpetual swaps market—a type of derivative popular in crypto that lacks an expiration date. Because US regulations currently make it difficult for domestic exchanges to offer these products to retail or institutional clients, the liquidity remains concentrated in jurisdictions with more flexible rules. This 'offshoring' of liquidity reduces oversight for US regulators and denies domestic investors access to deep, onshore market pools.
Market analysts suggest that bringing this volume onshore would significantly increase liquidity for major assets like Bitcoin and Ethereum within the US financial system. This move would likely enhance price stability and offer more sophisticated hedging tools for institutional players who are currently restricted from using offshore platforms. It could also force a shift in how US-based exchanges structure their professional trading tiers to compete with global leaders like Binance.
However, the path forward remains uncertain as the Clarity Act is currently stalled in legislative recess, leaving the SEC and CFTC to move forward with their own, often more rigid, rulemaking processes. For the 'lighter touch' to become a reality, there would likely need to be a coordinated effort between the agencies to define which derivatives fall under commodity or security status and to provide exemptions for high-volume trading activities.
Investors and industry stakeholders should closely monitor upcoming agency decisions on derivatives custody and any shifts in leadership that might signal a move toward the requested regulatory flexibility. The primary indicator of progress will be whether the CFTC gains more definitive authority over crypto spot markets and their related derivatives, which could pave the way for a more competitive US perpetuals market.