The US Commodity Futures Trading Commission has begun preparing financial markets for what Chair Michael Selig called “mass tokenization,” as the agency works to adapt existing rules for blockchain, artificial intelligence and onchain finance.
Summary
- CFTC Chair Michael Selig said financial markets should prepare for mass tokenization, with real world assets potentially settling almost instantly on blockchain based infrastructure.
- Selig said tokenized collateral could move in real time between clearinghouses, intermediaries and users as the CFTC adapts existing rules for onchain markets.
- The CFTC is moving ahead with crypto regulation under its existing authority after the Senate failed to advance the CLARITY Act on Sept. 15.
- The SEC has taken a parallel step by granting a five year exemption that allows qualifying platforms to trade tokenized versions of US listed stocks under specific conditions.
CFTC Chair Michael Selig said during the U.S. Treasury Market Conference on Sept. 22 that regulators need to prepare existing market structures for tokenized real world assets, 24/7 trading and technologies that could operate across traditional financial infrastructure.
Selig described tokenization as one of the technologies that could change how assets and collateral move through financial markets. High quality tokenized collateral, he said, could make liquidity more dynamic while allowing assets to move between clearinghouses, intermediaries and end users in real time.
Blockchain based financial infrastructure could eventually support near instantaneous settlement alongside that movement of collateral, according to Selig. He compared the potential change with the transition from trading through 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,” Selig said.
CFTC sees tokenization reaching multiple asset classes
Preparing markets for “mass tokenization” will require regulators to adjust older frameworks so blockchain and AI can be used at scale, Selig said. His remarks covered real world asset tokenization alongside onchain finance and markets that could operate around the clock.
Stablecoins are part of that work. Earlier in 2026, the CFTC expanded the types of eligible tokenized collateral to include certain payment stablecoins issued by national trust banks and published guidance covering the use of crypto assets and blockchain technology by regulated entities.
Selig said the commission plans to continue looking for ways to support stablecoin use by market participants, exchanges and clearinghouses. The agency intends to rely on principles based regulation as tokenization develops, while maintaining its existing market integrity responsibilities.
Around the clock trading is being treated separately depending on the asset involved. Selig said crypto and precious metals may currently be suited to 24/7 markets, while agricultural products, energy contracts and some financial products may not be ready for the same structure.
The CFTC has already sought public feedback on expanding trading hours and issued staff guidance covering 24/7 trading, clearing and settlement. Selig said surveillance systems, margin frameworks and operational safeguards would need to function continuously if markets move toward that model.
The tokenization push is unfolding while the agency is working on a separate regulatory framework for crypto markets using powers it already has.
As crypto.news previously reported, 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 failed to advance the CLARITY Act.
The filing, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” remains at the prerule stage. Proposed regulatory text has not been released, and the filing itself does not create new trading or registration requirements.
Selig had already said in August that the agency was prepared to pursue digital asset market rules even if Congress did not complete the CLARITY Act. The proposals under consideration included rules for leveraged or margined crypto transactions through regulated markets and possible regulatory routes for developers building onchain financial products.
CLARITY Act setback leaves agencies working under existing powers
The Senate failed to invoke cloture on the CLARITY Act on Sept. 15 in a 49 to 50 vote, leaving the measure 11 votes short of the 60 required to advance.
The failed procedural vote did not end work on the legislation. Seven Democratic senators who voted against cloture later said negotiations could continue, leaving open the possibility of another attempt if lawmakers reach an agreement on outstanding provisions. Talks over the CLARITY Act resumed after the vote, although no new Senate vote has been scheduled.
While Congress continues negotiations, both the CFTC and Securities and Exchange Commission have taken regulatory steps under their current statutory powers.
The CFTC’s Market Participants Division on Sept. 17 issued a no action position covering qualifying passive software providers that connect users with registered derivatives exchanges, brokers and futures commission merchants. Under the relief, staff will not recommend enforcement for certain failures to register as introducing brokers or associated persons when providers meet 10 specified conditions. The conditional registration relief applies only to activities covered by the staff letter.
SEC opens a five year route for tokenized US stocks
The SEC has moved further into tokenized markets through a temporary exemption that gives qualifying platforms a regulatory route for trading digital versions of US listed stocks.
On Sept. 17, the commission granted Tokenized Securities Venues temporary conditional relief from the definition of an exchange under the Securities Exchange Act. The exemption permits eligible venues to use permissioned automated market makers and liquidity pools to facilitate trading in tokenized National Market System stocks.
The five year tokenized stock exemption carries several conditions. Tokens traded under the framework must give holders the same rights and privileges as the corresponding traditional shares, while synthetic products that provide only price exposure do not qualify.
Venues must give the underlying company notice and an opportunity to object when an unaffiliated third party tokenizes its shares. Smart contracts used by participating venues must be public and auditable, while trading in a tokenized stock must stop when trading in the underlying stock is halted on its primary exchange.
The SEC placed limits on the number of symbols and trading volume permitted under the framework. Qualifying venues are required to disclose information about their operations and trading activity, while certain liquidity providers can receive temporary conditional relief from the Exchange Act’s dealer definition.
The exemption is scheduled to expire five years after publication, with the commission requesting public feedback while it considers longer term rules for onchain securities markets. SEC Chair Paul Atkins described the framework as an interim measure that would allow tokenized stock trading in a permissioned environment while regulators evaluate further changes.
US regulators prepare existing market rules for onchain finance
SEC Division of Trading and Markets Director Jamie Selway has said tokenization and crypto have become politically contentious even though he does not view market technology as inherently political. He said US development of the technology should be capable of drawing support across party lines.
The SEC’s September order puts part of that approach into practice by letting qualifying venues experiment with tokenized listed stocks without removing the underlying securities from federal securities law.
Commissioner Mark Uyeda said tokenization could be used across issuance, trading, transfer, settlement and ownership records. Under the temporary framework, regulators will be able to observe trading venues and market participants while considering permanent rules, he said.
CFTC policy is developing along a parallel track in derivatives markets. Selig said the agency expects blockchain, tokenized assets and continuous trading to become a larger part of financial infrastructure, but he rejected a single approach for every market.
The commission has instead tied potential 24/7 trading to the characteristics of individual asset classes. Selig said its role would include ensuring surveillance, margin systems and operational safeguards can work continuously where markets adopt round the clock trading.
For tokenized collateral, the agency has already permitted certain payment stablecoins issued by national trust banks to qualify under its collateral framework. Selig said the CFTC plans to continue examining additional uses for stablecoins across regulated market participants, exchanges and clearinghouses.
