Today in crypto, CFTC chair Michael Selig said the regulator will soon address how to handle perpetual futures contracts for cryptocurrencies. Meanwhile, a new working paper from the European Central Bank has some stark warnings about the impact of stablecoins on European banking and policymaking, and Iran crypto exchange Nobitex saw a 700% rise in crypto outflows within minutes of the US-Israel attack.
CFTC chair teases crypto perpetual futures in ‘the next month or so‘
Michael Selig, chair of the US Commodity Futures Trading Commission (CFTC), said the agency will soon address how to handle perpetual futures contracts for cryptocurrencies.
In a Tuesday panel hosted by the Milken Institute in Washington, DC, Selig said that the CFTC was working toward getting “true perpetual futures” in the United States “within the next month or so.”
The CFTC chair is currently the only Senate-confirmed commissioner, with no indication as of Tuesday that US President Donald Trump will nominate anyone to fill any of the agency’s four vacant commissioner slots.
“The prior administration drove a lot of these firms and the liquidity offshore,” said Selig in a panel discussion with SEC Chair Paul Atkins.
Stablecoins could weaken bank lending and monetary policy in Europe: ECB
The European Central Bank said increasing stablecoin use may pull money out of bank deposits and weaken the way monetary policy flows through to lending, according to a new ECB working paper.
Growing adoption of stablecoins, which are digital assets often pegged to currencies such as the US dollar or euro, is expected to draw funds away from traditional bank deposits, the ECB said in its latest working paper series, “Stablecoins and Monetary Policy Transmission,” released Tuesday.
“Our analysis shows that rising interest in stablecoins is linked to a measurable decline in retail bank deposits and a reduction in lending to firms,” ECB staff said, adding that stablecoins can reduce the amount of credit banks provide to the real economy.
The ECB noted that the effects are nonlinear and vary depending on the scale of stablecoin adoption, their design features and how they are regulated.
The report is part of the ECB’s ongoing efforts to monitor stablecoins, whose market capitalization has more than doubled over the past three years to $312 billion and is projected to reach $2 trillion by 2028.
“Banks rely heavily on deposits as a stable and low-cost source of funding to support lending to households and businesses,” the paper said. “When deposits decline, banks may be forced to rely more on wholesale or market-based funding, which is typically more expensive and less stable,” it added.
Iranian crypto outflows spike 700% after US-Israeli airstrikes
Iran’s top crypto exchange saw a significant spike in crypto withdrawals within minutes of the US and Israel launching strikes in Tehran on Saturday. However, a widespread internet outage curbed additional outflows.
In a post on Monday, Elliptic said crypto outflows from the Nobitex exchange surged by more than 700% to over $500,000 within minutes of the first airstrikes, with a chart showing that outflows reached nearly $3 million in a single hour later that day.
Elliptic said the sharp rise in outflows “potentially represents capital flight from Iran,” with its initial tracing showing that many of those funds were sent to foreign crypto exchanges.
“This allows funds to be moved out of Iran while avoiding some of the scrutiny of the global banking system,” Elliptic said.
However, crypto outflows from Nobitex fell sharply after Saturday, which fellow crypto forensics platform TRM Labs attributed to the Iranian regime enforcing strict internet blackouts.
Iran’s internet connectivity reportedly fell by approximately 99% shortly after the conflict unfolded, TRM noted.
