Prediction markets are expected to play a central role in the regulatory overhaul, despite opposition from gambling interests.

The plan starts with a comprehensive staff review of existing rules—many aimed at agricultural futures—to identify updates or replacements needed for 24/7 blockchain-native markets and new innovations.

The announcement sits within a broader political and regulatory debate, including the Digital Asset Market Clarity Act and ongoing U.S. crypto regulation talks.

The CFTC announces a Future-Proof initiative to modernize U.S. financial regulation for digital assets, prediction markets, and other emerging technologies, shifting from enforcement-first tactics to formal rulemaking.

The initiative seeks a 'minimum effective dose of regulation'—protecting against fraud and manipulation without stifling innovation.

The push is driven by a cryptocurrency market structure bill that recently passed the House but is stalled in the Senate, creating urgency for action.

The initiative aims to enable innovation in digital markets while safeguarding against systemic risks, favoring tailored regulation over broad, one-size-fits-all rules.

The piece references figures and cases like Brian Quintenz, Kalshi, Polymarket, and ErisX to illustrate the regulatory trajectory and politics surrounding prediction markets and crypto regulation.

Lobbying groups push Congress to use crypto legislation to ban sports event contracts amid integrity concerns and regulatory gaps.

Leadership changes bolster the effort, with new appointments to strengthen the CFTC’s capability to regulate emerging markets and digital assets.

The overarching objective is to keep the U.S. as a crypto innovation hub by delivering clear, stable regulations and reducing offshore migration of crypto businesses.

Selig notes rapid growth in prediction markets and digital assets, arguing for purpose-built regulatory frameworks rather than retrofitted ones.