On March 20, FIA submitted a letter to the Commodity Futures Trading Commission responding to the CFTC's proposed interpretation of how its rules apply to retail trading in bitcoin and other virtual currencies. The interpretation centers on the "actual delivery" requirement of the Commodity Exchange Act; under this requirement, retail transactions in commodities become subject to CFTC regulation if it takes more than 28 days for delivery to occur.
FIA recommended that the CFTC "proceed with caution" to avoid stifling innovation as the agency considers how this requirement should apply to the evolving virtual currency marketplace. FIA also urged the CFTC to focus on the title transfer aspect of delivery and develop a "principles-based standard" that is sufficiently flexible to allow the market to develop various title transfer mechanisms.
"FIA recommends that the Commission proceed with caution in interpreting the CEA’s 'actual delivery' requirement in the context of a nascent and developing virtual currency market," the letter said. "Any interpretation adopted by the Commission should not inhibit innovation in new cash commodity markets or call into question customary practices in other cash commodity markets."
FIA's letter was drafted by a working group formed by FIA's Law & Compliance Committee