The U.S. Commodity Futures Trading Commission, or CFTC, has publicized clarity on physical digital asset delivery as it applies to traded market products.

“This announcement is meant to synthesize prior Commission guidance and enforcement actions as well as federal judicial precedent in this area,” CFTC Office of Public Affairs Director and Chief Communications Officer Michael Short told Cointelegraph in an email. “It is meant to reaffirm and illustrate the Commission’s approach.”

“The Commodity Futures Trading Commission today announced the Commission voted unanimously to approve final interpretive guidance concerning retail commodity transactions involving certain digital assets,” the Commission said in a statement provided to Cointelegraph, adding:

“Specifically, the guidance clarifies the CFTC’s views regarding the ‘actual delivery’ exception to Section 2(c)(2)(D) of the Commodity Exchange Act (CEA) in the context of digital assets that serve as a medium of exchange, colloquially known as ‘virtual currencies.’”

Commodities trading in the mainstream involves physical delivery

In traditional markets, when participants trade futures, they are betting on the future price action of an underlying asset. If they hold those futures all the way through settlement, they end up receiving the underlying asset, physically delivered to them.

The CFTC’s new clarity involves a 28-day deadline for physical delivery, allowing the buyer to use their purchased digital asset after that period.

The new guidance includes a person holding or controlling such a commodity, bought via leverage trading or other methods. He or she has “the ability to use the entire quantity of the commodity freely in commerce (away from any particular execution venue) no later than 28 days from the date of the transaction and at all times thereafter,” the Commision said.

The offering party gives over ownership

The CFTC included that the selling party and facilitator do not retain any ownership. The commission explained:

“The offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) do not retain any interest in, legal right, or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction.”

Continued clarity from the CFTC shows the prevalence of digital asset trading in the mainstream world, spurring responsive regulatory guidance. Just this January, the Chicago Mercantile Exchange, or CME, launched Bitcoin options trading. Such a product launch showed continued demand for trading Bitcoin after the outfit launched BTC futures in 2017.

UPDATE March 20, 19:15 UTC: This article has been updated with comments Cointelegraph received from the CFTC’s Michael Short after initial publication.