CFTC joins tokenization pilots to learn crypto’s real-world impact

The US Commodity Futures Trading Commission (CFTC) will watch tokenization pilots to assess crypto’s real-world impact. 

Caroline D. Pham, acting chairperson of the CFTC, spoke at the Medici Conference, and she said they intend to monitor multiple tokenization pilot schemes. She noted that they must understand how tokenized securities can function within legacy financial infrastructure and ensure that laws are written to support that vision. Through studying these pilots, the CFTC wants to gain technological expertise that could help provide input on future regulations.

The agency’s observer role signifies a proactive approach to engaging with emerging financial technologies without direct market intervention. The approach permits the CFTC to closely watch developments without giving up its regulatory oversight.

Crypto community members are pleased with the CFTC’s planned tokenization pilot initiative

The CFTC wants to learn more about the practical impact of tokenized assets and how they operate in the real world. 

In an interview at the Medici Conference with Journalist Eleanor Terett, Pham argued that they wanted to understand tokenization tech. 

Terett even posted on X:

CFTC plans to be an observer on a handful of industry tokenization pilot programs in order for the agency to learn first hand how well-tokenized assets can function in the real world and gain experience with the technology.

Eleanor Terett

Responding to Terett’s post, most crypto members seemed pleased with the CFTC’s initiative, with some arguing that it’s the best approach. The Department of Government Efficiency also commented on the matter, posting an automated message on X. It described the CFTC’s decision as smart, saying that using stablecoins as collateral could modernize financial systems and reduce bureaucratic insufficiencies.

The CFTC declared it would host a CEO forum to talk about a pilot program for stablecoins

In February, the CFTC announced it would hold a CEO forum to discuss a pilot program focused on non-cash collateral like stablecoins. The forum would include Circle, Coinbase, Crypto.com, MoonPay, and Ripple’s leaders. 

Back then, Pham insisted that the agency was geared toward innovation and would engage with market participants to achieve Trump’s crypto agenda. 

In September 2023, she also suggested having a pilot initiative focused on regulating crypto. In her proposal, she detailed they would start discussions with multiple stakeholders, and then the agency would propose and adopt rules around registration requirements and risk management. Then, the agency would assess whether to modify the rules permanently.

Last year, The CFTC’s Global Markets Advisory Committee (GMAC), sponsored by Acting Chairman Pham, also proposed expanding the use of non-cash collateral through distributed ledger technology. At the time, Pham believed the GMAC’s recommendation on tokenized non-cash collateral represented a meaningful first step toward achieving regulatory clarity for digital assets in the U.S. She said this development would help unlock opportunities for the derivatives markets while maintaining the same guardrails and protections already in place. 

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