Mass Financial Tokenization Preparation
CFTC Chairman Urges Financial Regulators to Prepare for Mass Tokenization and 24/7 Trading
Anonymous
CFTC Chairman Michael Selig said regulators must prepare for large-scale tokenization, on-chain finance and 24/7 trading, which he expects will transform financial markets more over the next decade than in the previous several decades combined. He called for adapting existing rules so blockchain and artificial intelligence can be deployed across market infrastructure, while identifying tokenized real-world assets as a potential source of faster settlement, more flexible liquidity and greater market resilience. The CFTC has issued guidance and sought public comment on round-the-clock energy-derivatives trading, and it has allowed stablecoins issued by national trust banks to qualify as collateral. Selig said the agency would continue encouraging responsible stablecoin adoption by market participants, exchanges and clearinghouses. The SEC has separately introduced an innovation exemption for on-chain trading of tokenized stocks, while broader congressional legislation on digital-asset regulation remains stalled.
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Selig said high-quality tokenized real-world-asset collateral could make liquidity more agile and potentially strengthen the resilience of financial markets.
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He said near-instant settlement and real-time collateral transfers among clearinghouses, intermediaries and end users could produce a market-wide transformation comparable to the shift from open-outcry trading to electronic trading.
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Selig also highlighted the scale of the derivatives market, saying its global notional value had nearly doubled over the past 20 years to about $1,200 trillion, with the CFTC overseeing nearly half of it.
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