During the US Treasury Market Conference on September 22, CFTC Chair Michael Selig emphasized that regulators need to prepare existing market structures for tokenized real-world assets, 24/7 trading, and technologies operating across traditional financial infrastructure.
Selig highlighted tokenized collateral as a driver for dynamic liquidity, comparing the potential transformation to the historical transition from pit trading with hand signals to modern electronic markets.
CFTC Sees Tokenization Reaching Multiple Asset Classes
Preparing markets for “mass tokenization” requires updating legacy frameworks to support blockchain and AI integration at scale. As part of this effort, the CFTC previously expanded eligible tokenized collateral to include select payment stablecoins issued by national trust banks and issued guidance covering blockchain usage by regulated entities.
Regarding round-the-clock operations, Selig noted that while crypto and precious metals are currently well-suited for 24/7 trading, commodity sectors like agricultural products and energy contracts may require different structural considerations.
The agency’s regulatory push continues under its existing statutory powers. Following the Senate’s 49–50 vote on September 15 failing to advance the CLARITY Act, the CFTC submitted its “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets” framework to the White House Office of Information and Regulatory Affairs on September 17.
Additionally, the CFTC Market Participants Division issued a conditional no-action letter on September 17, providing registration relief for qualifying passive software providers connecting users to registered derivatives exchanges and brokers.
SEC Opens Five-Year Route for Tokenized US Stocks
Parallel to the CFTC, the Securities and Exchange Commission (SEC) granted temporary conditional relief allowing Tokenized Securities Venues to trade digital versions of US-listed National Market System (NMS) stocks using permissioned automated market makers (AMMs) and liquidity pools.
Key parameters of the SEC’s five-year tokenized stock exemption include:
- Tokens must grant holders the same rights and privileges as underlying traditional shares; synthetic products providing price exposure only are excluded.
- Venues must notify companies and allow them an opportunity to object before third parties tokenize their shares.
- Smart contracts must be public and auditable, with token trading automatically halting whenever primary exchange trading in the underlying stock stops.
- Strict caps apply to allowable symbols and trading volumes during the five-year evaluation period.
SEC Division of Trading and Markets Director Jamie Selway noted that while tokenization and crypto have faced political debate, market technology itself is non-partisan and capable of drawing cross-party support. Commissioner Mark Uyeda added that observing live permissioned environments will help regulators formulate permanent, long-term rules for on-chain security issuance, trading, and settlement.
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