CFTC Chair Sees Tokenization as Key to Financial System Evolution

The US Commodity Futures Trading Commission (CFTC) is pushing for 'mass tokenization' of financial markets, according to its chair Michael Selig. Tokenization could enable near-instant settlement and real-time collateral movement between clearinghouses, intermediaries, and users, Selig said.

In remarks at the US Treasury Market Conference, Selig stated that just as electronic trading advanced the financial system, tokenization can do the same for all asset classes. He added that the CFTC would pursue principles-based rules as tokenization and onchain finance evolve.

The CFTC chair noted in August that the commission would move forward with crypto rules under its existing authority if Congress did not pass the CLARITY Act, which failed to advance in the Senate on September 15. The CFTC submitted a regulatory action covering crypto asset transactions and markets for White House review on September 17.

The Securities and Exchange Commission (SEC) has also been promoting the development of tokenized markets. In a Bloomberg TV interview, SEC Division of Trading and Markets Director Jamie Selway said that tokenization and crypto have become politicized but are 'not naturally a politicized function.'