CFTC Chairman Selig: The market needs to be ready for large-scale tokenization and 24/7 trading

Michael Selig, the chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that regulators need to prepare for "mass tokenization" and adjust existing markets for new technologies such as blockchain and artificial intelligence. Selig mentioned at the U.S. Treasury Market Conference held by the New York Federal Reserve on Tuesday that developments like tokenization, on-chain finance, and 24/7 trading could lead to changes in the financial markets over the next decade that surpass the sum of the past several decades.

Selig noted that the entire Trump administration laid the groundwork for the U.S. market to maintain its global leadership by embracing innovation, encouraging competition, and implementing reasonable regulations. The CFTC will also seek more ways to encourage market participants, exchanges, and clearinghouses to responsibly adopt stablecoins. Over the past year, the agency has issued guidance and sought public input on 24/7 trading in the energy derivatives market; in February of this year, the CFTC included stablecoins issued by National Trust Bank in the list of eligible collateral.

Meanwhile, the CFTC's sister agency, the U.S. Securities and Exchange Commission (SEC), released the highly anticipated "innovation exemption" last week, creating space for on-chain trading of tokenized stocks. After a bill regulating the cryptocurrency industry stalled in the Senate, the two agencies are advancing their respective agendas.