CFTC Clears Path for Tokenized Customer Funds in Derivatives Markets

The Commodity Futures Trading Commission (CFTC) has issued updated guidance on tokenized customer funds and blockchain records. Registered derivatives firms can now hold customer money in tokenized versions of permitted assets, provided the token grants holders the same rights as traditional assets.

The update adds four new items to a set of frequently asked questions first published in March. It allows futures commission merchants and derivatives clearing organizations to invest customer funds in tokenized forms of already-approved investments. Firms can also use blockchain records to meet their bookkeeping obligations, although off-chain backup copies are not mandatory.

CFTC Chair Michael Selig framed the update as part of a broader effort to give the crypto industry workable rules. The guidance comes after the Senate failed to advance the Digital Asset Market Clarity Act, which would have divided oversight duties between the CFTC and the Securities and Exchange Commission (SEC).

The SEC has also taken steps to clarify its stance on tokenized assets. In August, it put forward rules covering certain investment contracts involving crypto assets. On September 17, it granted temporary relief for venues trading tokenized U.S.-listed stocks through permissioned automated market makers and liquidity pools.