Commodity Futures Trading Commission chair Michael Selig says US financial markets must prepare for “mass tokenization” as blockchain, artificial intelligence, on-chain finance and round-the-clock trading shape the next phase of market development.
Speaking at a U.S. Treasury Market conference at the New York Fed on Tuesday, Selig said the coming decade could bring greater change than the previous several decades combined.
“With developments like tokenization, on-chain finance, and 24/7 trading, the next decade will likely bring more change to financial markets than the previous several decades combined,” he said.
Selig said the United States would continue to lead in adapting to those developments. He added that the Trump administration had already begun preparing the country by supporting innovation, promoting competition and adjusting regulation while protecting confidence in the financial system.
“Across the entire Trump administration, we’ve already laid the groundwork to continue doing so by embracing innovation, encouraging competition, right-sizing regulation and maintaining the trust that has made our markets the gold standard across the world,” he said.
The CFTC has spent the past year issuing guidance and seeking public feedback on the possibility of 24/7 trading in energy derivatives markets. That work reflects the regulator’s increasing focus on markets that operate continuously rather than within traditional trading hours.
In February, the agency also expanded the range of assets that could be used as eligible collateral. The change included stablecoins issued by national trust banks.
Selig said the CFTC would continue looking for ways to support the use of stablecoins while ensuring that their adoption was responsible.
“The CFTC will look to find more ways to encourage responsible stablecoin adoption for market participants, exchanges, and clearinghouses,” he said.
The CFTC’s sister agency, the Securities and Exchange Commission, has also moved to create space for blockchain-based financial products.
Last week, the SEC released its long-awaited “innovation exemption”. The measure is intended to allow on-chain trading of tokenized stocks.
The two regulators are advancing their work as a wider bill aimed at regulating the cryptocurrency industry remains stalled in the Senate.
