CFTC and SEC push tokenization as CLARITY Act stalls in Senate

CFTC chair calls for 'mass tokenization'

The head of the US Commodity Futures Trading Commission (CFTC) said financial markets should get ready for "mass tokenization" as regulators update existing rules for blockchain and onchain markets.

In a speech on Tuesday at the US Treasury Market Conference, CFTC Chair Michael Selig said tokenizing real-world assets (RWAs) — meaning putting traditional assets like stocks or bonds on a blockchain — could make the financial system more efficient. He said it could allow near-instant settlement and real-time movement of collateral between clearinghouses, intermediaries, and users.

"Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes," Selig said.

Regulators move despite CLARITY Act setback

• The US Senate failed to advance the CLARITY Act on Sept. 15, a bill that would have clarified crypto rules.
• On Sept. 17, the CFTC submitted a regulatory action covering crypto asset transactions and markets for White House review. It is still at the "prerule" stage and does not detail planned regulations.
• The SEC granted a temporary "Innovation Exemption" on Sept. 17 for tokenized US stock trading, allowing certain platforms to trade digital versions of US-listed stocks under conditions.

SEC sees tokenization as bipartisan

Jamie Selway, director of the SEC's Division of Trading and Markets, said in a Bloomberg TV interview that tokenization and crypto have recently become politicized but are "not naturally a politicized function." He said US success in developing these markets should receive bipartisan support.

SEC Chair Paul Atkins said in February that such an exemption could help onchain trading while regulators develop longer-term rules.

What is confirmed and what is still unclear

Confirmed facts: The CFTC chair publicly supported tokenization. The Senate failed to pass the CLARITY Act on Sept. 15. The CFTC submitted a prerule filing for White House review on Sept. 17. The SEC granted a temporary exemption for tokenized stock trading on Sept. 17.

What remains unclear: The specific details of the CFTC's planned regulations, and the exact conditions and platforms covered by the SEC's temporary exemption.

Why this matters

These moves show that US regulators are actively pursuing tokenization even without new legislation. If implemented, tokenization could change how assets are traded and settled, potentially making markets faster and more efficient.

Sources

• Cointelegraph