CFTC and SEC Move Toward Broader Tokenized U.S. Markets

CFTC Chair Michael Selig said financial markets should prepare for large-scale tokenization as the agency and the Securities and Exchange Commission advance separate paths for blockchain-based trading and settlement.

Speaking at the Treasury Market Conference on Tuesday, Selig described tokenization as a major infrastructure shift that could support near-instant settlement and faster movement of collateral across financial markets. He said the CFTC would use principles-based rules to guide the development of tokenized assets and other on-chain financial activity.

The CFTC also submitted a crypto asset trading and market-structure proposal to the White House on Sept. 17. The filing is in the preliminary “prerule” stage, and its specific framework has not been disclosed.

The SEC issued a temporary Innovation Exemption on Sept. 17 that permits certain platforms to trade tokenized versions of U.S.-listed stocks under specified conditions. SEC Chair Paul Atkins previously said the approach could give regulators time to develop longer-term rules.

The moves place tokenized Treasuries, equities and other assets closer to the center of the U.S. regulatory agenda, with the agencies now working through how traditional market rules should apply on blockchain networks.