TLDR
- CFTC Chair Michael Selig said U.S. regulators must prepare markets for “mass tokenization.”
- He spoke Tuesday at a U.S. Treasury Market conference at the New York Fed.
- Selig named tokenization, onchain finance and 24/7 trading as major forces for the next decade.
- In February, the CFTC added stablecoins issued by national trust banks to its eligible collateral list.
- The SEC released an “innovation exemption” last week for onchain trading of tokenized stocks.
The head of the Commodity Futures Trading Commission says U.S. financial markets need to get ready for big changes. Chair Michael Selig said regulators must prepare for “mass tokenization.”
Tokenization means turning assets such as stocks or bonds into digital tokens on a blockchain. Selig also said current markets should be adjusted for new technology, including blockchain and artificial intelligence.
He made the comments on Tuesday during a U.S. Treasury Market conference at the Federal Reserve Bank of New York.
Selig Expects Major Change in the Next Decade
Selig said the coming years could reshape how markets work. “With developments like tokenization, on-chain finance, and 24/7 trading, the next decade will likely bring more change to financial markets than the previous several decades combined,” he said.
He added that the United States will continue to lead global markets.
“Across the entire Trump administration, we’ve already laid the groundwork to continue doing so by embracing innovation, encouraging competition, right-sizing regulation and maintaining the trust that has made our markets the gold standard across the world,” Selig said.
His remarks come as the Trump administration prepares for a broad update to financial markets. Tokenization, onchain finance and round-the-clock trading are all part of that effort.
CFTC Moves on 24/7 Trading and Stablecoins
The CFTC has already taken steps in these areas. Over the past year, the agency issued guidance on 24/7 trading for energy derivatives markets.
It has also asked the public to comment on round-the-clock trading. These actions reflect the agency’s growing interest in markets that never close.
In February, the CFTC expanded its list of eligible collateral. The list now includes stablecoins issued by national trust banks.
Collateral is an asset that traders post to back their positions. Adding stablecoins gives market participants another option.
Selig said the agency will look for more ways to “encourage responsible stablecoin adoption for market participants, exchanges, and clearinghouses.”
The CFTC is not the only regulator making changes. Its sister agency, the Securities and Exchange Commission, is also acting.
Last week, the SEC released its long-awaited “innovation exemption.” The exemption is designed to make room for onchain trading of tokenized stocks.
Both agencies are moving forward on their own. A bill to regulate the crypto industry as a whole has stalled in the Senate.
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