Prediction Markets as Derivatives, CFTC Resources, and CBDCs (with Tim Stenovec, Isabelle Lee)

Chris Giancarlo views prediction markets as a new form of derivatives, not a new asset class, with huge potential for corporate hedging. He argues they should be regulated as marketplaces at the federal level, not as casinos at the state level. He estimates the CFTC needs 10-20% more resources.

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RUT

Oil

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Jefferies 8.0
Investment Bank $57.00B
Chris Giancarlo 9.5

Prediction Markets as Derivatives, CFTC Resources, and CBDCs (with Tim Stenovec, Isabelle Lee)

dxy

Giancarlo's support for private sector innovation in stablecoins and digital dollars suggests the dollar's dominance will be maintained, but not strengthened, as the system modernizes.

3/19/2026 4:23:21 PM	short term up	5 days later	-0.05%	-0.05%
3/19/2026 9:28:23 AM	short term cautious up	5 days later	-0.05%	-0.03%
12/9/2025 1:59:10 PM	medium term cautious down	20 days later	-0.56%	+0.28%

ndx

The industrialization of crypto is happening. Institutions are adopting it as fundamental architecture. The architecture of future finance will be built on digital networks.

12/22/2025 2:33:41 PM	medium term up	20 days later	+0.78%	+0.78%
10/29/2025 11:31:07 PM	short term up	5 days later	-1.16%	-1.16%

rut

Tokenization and digital asset adoption could benefit smaller innovative companies, but Giancarlo focuses more on institutional adoption which favors larger caps.

yields

No direct mention of yields, but regulatory progress and institutional adoption suggest stable macro environment.

4/27/2026 7:46:28 AM	medium term cautious up	20 days later	+6.18%	+3.09%
1/2/2026 5:09:52 PM	medium term down	21 days later	+1.15%	-1.15%
12/22/2025 2:33:41 PM	medium term down	20 days later	+0.43%	-0.43%
12/1/2025 8:38:44 PM	medium term down	20 days later	+2.03%	-2.03%
10/16/2025 3:07:34 PM	medium term cautious down	20 days later	+2.15%	-1.07%
9/3/2025 7:11:49 PM	medium term down	20 days later	-0.69%	+0.69%
8/28/2025 6:44:17 PM	short term down	5 days later	-0.38%	+0.38%
8/20/2025 8:30:01 PM	medium term cautious up	20 days later	-6.88%	-3.44%
8/20/2025 8:29:45 PM	medium term cautious down	20 days later	-6.88%	+3.44%
8/20/2025 3:30:11 PM	medium term cautious down	20 days later	-6.88%	+3.44%
8/14/2025 8:32:54 PM	medium term cautious down	20 days later	-3.51%	+1.76%

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Asks about Chris Giancarlo's biggest agenda at Jefferies.

Isabelle Lee
Chris Giancarlo

The policy environment has shifted from hostile to a tailwind for builders. He joined Jefferies to help firms raise capital and build. He previously built GFI Group and took it public on the NYSE.

During the Biden years, one side became hostile to crypto. Now the winds have changed.
Asks where prediction markets fit in, given his role at Polymarket.

Tim Stenovec
Chris Giancarlo

He is still very bullish on prediction markets. Along with stablecoins, they are among the first tangible, global innovations from digital networks of value.

He had no official role at Polymarket, only advised in the first few years.
Asks if prediction markets are a new asset class.

Tim Stenovec
Chris Giancarlo

Prediction markets are a new form of derivatives. The big opportunity is corporate hedging - getting perfect hedges on risk from an accounting perspective. This is still very early days.

The builders are in their 20s and 30s. We haven't seen industrialization yet, but it's not far off.
Asks why prediction markets should be treated as financial risk markets rather than sportsbooks.

Isabelle Lee
Chris Giancarlo

In a sportsbook, the house sets odds and participants are only price takers. In a prediction market, it's a true marketplace where participants are both price makers and takers. Marketplaces are regulated at the federal level, casinos at the state level.

Imagine 26 different states trying to regulate global markets - that's not how the US has done it.
Asks if DraftKings and FanDuel should be regulated by the CFTC.

Tim Stenovec
Chris Giancarlo

No, their core business is wagering against the house. If they go into true markets, then a federal regulator is needed. Regulation is by activity, not by company.
Pushes back that sports betting is 80-90% of prediction market volume.

Tim Stenovec
Chris Giancarlo

The division is not sports vs non-sports, but marketplace vs casino. A marketplace where the house doesn't win when others lose is regulated at the federal level.

This is consistent with how we've done it for a long time.
Asks how to prevent insider trading in prediction markets.

Isabelle Lee
Chris Giancarlo

The CFTC already has insider trading bans. Platforms like Kalshi are prosecuting violations. The CFTC is in a rulemaking process to potentially enhance the ban. The right response is to get regulations right, not put our head in the sand.

He faced similar concerns when greenlighting Bitcoin futures 10 years ago.
Asks if the CFTC has the personnel to do this now.

Tim Stenovec
Chris Giancarlo

The CFTC has always needed more resources. It needs 10-20% more. Congress is giving the agency more responsibility and needs to give it more resources.

If the CFTC needs more resources, what do the states have to police global markets?
Asks what the next catalyst for crypto is.

Isabelle Lee
Chris Giancarlo

We are seeing the industrialization of crypto. Institutions like DTCC and Bank of New York are putting their entire infrastructure onto digital rails. The architecture of future finance will be built on digital networks.

This is like Tesla 10 years ago - the promise is now being realized.
Asks why supporting crypto and CBDCs should coexist.

Isabelle Lee
Chris Giancarlo

Stablecoins are corporate liabilities, CBDCs are sovereign obligations. During a run on stablecoins, people will want a sovereign obligation. A US CBDC could be designed to reflect free society values, unlike China's control instrument or Europe's surveillance instrument. The US is right to experiment with the private sector first.

Digital money will be like digital photography - your money will be as fast and accessible as your digital photos.

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