CFTC Chairman Urges Preparation for Large-Scale Tokenization, Shift to On-Chain Finance

The chairman of the U.S. Commodity Futures Trading Commission called on markets to prepare for tokenization, on-chain finance and a shift to 24-hour trading.

Speaking at a U.S. Treasury market conference at the Federal Reserve Bank of New York on September 23, CFTC Chairman Mike Selec said the next decade could bring bigger changes to financial markets than the past several decades combined, The Block reported.

"Given changes such as tokenization, on-chain finance and 24-hour trading, the next decade will bring greater changes to financial markets than the past several decades combined," Selec said. "Regulators need to prepare markets for large-scale tokenization."

Selec also said the U.S. would maintain its lead in innovation. Across the Trump administration, he added, the groundwork has already been laid by embracing innovation, promoting competition, applying an appropriate level of regulation and preserving market trust that has become a global standard.

The CFTC is already fleshing out related policies. It has issued guidance on 24-hour trading in energy derivatives markets and sought public comment. In February, it also added stablecoins issued by national trust banks to the list of eligible collateral assets.

The agency will continue to explore ways to encourage the responsible adoption of stablecoins by market participants, exchanges and clearinghouses, Selec added.

Meanwhile, the Securities and Exchange Commission, the CFTC's sister agency, last week unveiled an "innovation exemption" that would allow on-chain trading of tokenized stocks. Broader legislative talks on regulating the digital-asset industry remain deadlocked in the Senate, leaving the two agencies to update the framework through separate administrative actions.