CFTC chair urges ‘mass tokenization’ as SEC backs tokenized stocks
US Commodity Futures Trading Commission Chair Michael Selig told the US Treasury Market Conference on Sept. 22 that financial markets should prepare for “mass tokenization,” describing blockchain-based infrastructure that could settle real-world assets almost instantly and move collateral in real time, according to Crypto.news.
Selig said existing market structures need updating for tokenized real-world assets, 24/7 trading and technologies that could span traditional financial infrastructure. He compared the shift to the move from trading by hand signals to electronic markets. “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,” he said. Cointelegraph also reported his remarks.
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Key facts
- Selig said on Sept. 22 that high-quality tokenized collateral could make liquidity more dynamic and let assets move between clearinghouses, intermediaries and end users in real time, with blockchain infrastructure potentially supporting near-instantaneous settlement.
- On Sept. 15, the Senate failed to invoke cloture on the CLARITY Act in a 49 to 50 vote, leaving the measure 11 votes short of the 60 required to advance.
- On Sept. 17, the SEC granted Tokenized Securities Venues temporary conditional relief from the definition of an exchange under the Securities Exchange Act, letting qualifying venues use permissioned automated market makers and liquidity pools for tokenized National Market System stocks under a five-year exemption.
- The CFTC submitted its crypto market framework to the White House Office of Information and Regulatory Affairs on Sept. 17, two days after the Senate vote; the filing, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” remains at the prerule stage.
- Earlier in 2026, the CFTC expanded eligible tokenized collateral to include certain payment stablecoins issued by national trust banks and published guidance on crypto and blockchain use by regulated entities.
Two agencies, two tracks
Both agencies are advancing onchain initiatives under existing statutory powers while Congress remains stalled on the CLARITY Act. Selig had already said in August that the CFTC was prepared to pursue digital asset market rules even if the bill did not pass, and the Sept. 15 failed procedural vote did not end work on the legislation. Seven Democratic senators who voted against cloture later said negotiations could continue. Talks resumed after the vote, but no new Senate vote has been scheduled.
The CFTC’s Market Participants Division issued a no-action position on Sept. 17 covering qualifying passive software providers that connect users with registered derivatives exchanges, brokers and futures commission merchants. Staff will not recommend enforcement for certain failures to register as introducing brokers or associated persons when providers meet 10 specified conditions. The relief applies only to activities covered by the staff letter.
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At the SEC, the five-year tokenized stock exemption carries several conditions: tokens must give holders the same rights and privileges as the corresponding traditional shares, synthetic products offering only price exposure do not qualify, venues must notify the underlying company and give it a chance to object when an unaffiliated third party tokenizes its shares, smart contracts must be public and auditable, and trading in a tokenized stock must pause when the underlying stock is halted on its primary exchange. The SEC limited the number of symbols and trading volume under the framework, required qualifying venues to disclose operational and trading information, and offered certain liquidity providers temporary conditional relief from the Exchange Act’s dealer definition. The exemption is scheduled to expire five years after publication, with public feedback requested.
SEC Chair Paul Atkins described the framework as an interim measure allowing tokenized stock trading in a permissioned environment while regulators evaluate further changes. Commissioner Mark Uyeda said tokenization could be used across issuance, trading, transfer, settlement and ownership records, and that the temporary framework would let regulators observe venues and participants while weighing permanent rules.
Why it matters
The two moves cement the idea that US derivatives and securities regulators intend to shape onchain markets through their existing rulebooks rather than wait for new legislation. For exchanges, clearinghouses and collateral managers, the practical effect is a widening set of permitted structures: stablecoin collateral in derivatives, and tokenized listed equities in a permissioned securities venue. But each route is conditional and temporary, with the SEC exemption set to expire in five years absent permanent rules, and the CLARITY Act still unresolved.
What to watch
Attention now shifts to the SEC’s public feedback period on the tokenized stock exemption and to whether the White House review of the CFTC’s crypto framework progresses beyond the prerule stage. Any new Senate action on the CLARITY Act, or a decision by negotiators to abandon the effort, would determine how much of the onchain agenda ultimately rests on agency authority alone.
Sources: crypto.news, Cointelegraph
