CFTC Backs Tokenization, SEC Unveils Path for On-Chain Stocks

CFTC Chair Michael Selig sees tokenization as a way to modernize financial markets and make them more efficient. Speaking at the US Treasury Market Conference, he compared the potential of tokenization to the shift from hand signals to electronic trading in earlier market modernizations.

Selig believes that tokenizing real-world assets could enable near-instant settlement and real-time collateral transfer between clearinghouses, intermediaries, and end users. He emphasized that the CFTC's regulatory posture is 'principles-based,' focusing on outcomes and risk controls rather than prescriptive technology rules.

This approach may allow multiple tokenization architectures to fit within a common regulatory logic as long as market conduct and compliance expectations are met. The CFTC is currently working on a regulatory action covering crypto asset transactions and markets, which is still in the 'prerule' stage.