Following the election of Donald Trump as the new president of the United States, regulators are pushing for crypto market reforms, ranging from creating regulatory sandboxes to allowing shares of tokenized funds as collateral in traditional derivatives trading.
During an interview with Fox Business, SEC Commissioner Mark Uyeda said that President-elect Donald Trump was right to end the war on crypto in the United States. He also commented on what could be done to make the country a leader in the global crypto market.
According to Uyeda:
“First of all, from a regulatory point of view, we can provide the necessary clarity. Some cryptocurrencies aren’t even a security at all, but we need to make it clear whether or not you would fall under the jurisdiction of the SEC.
If a token offering falls under the jurisdiction of the SEC, clear guidelines are needed so that crypto companies can decide the correct course of action to comply with the regulator’s rules.
Uyeda also championed the creation of “safe zones,” which are regulatory sandboxes where crypto companies could experiment with different products, thereby enabling “innovation.”
The SEC commissioner also argued that regulators must work with Congress and other federal agencies to create a cohesive approach to crypto.
Finally, given that Gary Gensler will step down as SEC Chairman on January 20, Uyeda was asked if he was interested in serving in the role, and he said it was a decision for the Chairman.
Tokenized funds as collateral
Uyeda’s call for reform comes amid a broader regulatory shift toward crypto and blockchain technology in the financial sector. The CFTC recently recommended using tokenized funds as collateral.
Bloomberg News reported on November 22 that the Commodity Futures Trading Commission’s (CFTC) Global Markets Advisory Committee approved the use of tokenized assets, such as money market fund tokens launched by BlackRock and Franklin Templeton, as collateral for derivatives trading..
The committee’s recommendation, which now awaits review by the CFTC, highlights the potential of distributed ledger technology (DLT) to improve the efficiency and transparency of collateral management.
The advisory committee’s recommendation provides a framework for registered companies to hold and transfer tokenized non-monetary collateral using distributed ledger technology. The framework ensures compliance with existing margin requirements set by the CFTC, other US regulators and derivatives clearing organizations.
Although the recommendations are not binding, the CFTC frequently incorporates advisory input into its policy development due to the specialized expertise of the committees. However, there is no clear timetable as to when or whether the CFTC will adopt these recommendations into formal guidance or rules.
