THE Commodity Futures Trading Commission (CFTC)), the US agency responsible for regulating derivatives markets, is increasingly exploring the role of digital assets and blockchain technology in modernizing financial systems.
As part of these efforts, the CFTC’s Global Markets Advisory Committee (GMAC), supported by Commissioner Caroline D. Phamproposed a recommendation to expand the use of non-cash collateral through distributed ledger technology (DLT).
The recommendation aims to improve the efficiency of financial transactions by integrating blockchain or other distributed ledger technologies to streamline the use of non-cash collateral. The move comes in response to operational challenges that have hampered the broader application of these safeguards in U.S. derivatives markets. By leveraging DLT, the CFTC hopes to reduce risks and improve market efficiency, while maintaining existing regulatory safeguards.
Commissioner Pham highlighted the importance of the proposal, citing successful global examples of asset tokenization, such as digital government bond issuances in Europe and Asia, and large volumes of institutional transactions powered by blockchain platforms.
She emphasized that the adoption of these technologies could significantly improve the efficiency and competitiveness of U.S. markets, while preserving market integrity and investor protection.
Regulatory clarity
“Across the world, there are successful and proven business use cases for asset tokenization, such as digital government bond issuances in Europe and Asia, a notional volume of over 1.5 trillion of dollars in institutional pension and payment transactions on enterprise blockchain platforms, and more efficient transactions. warranty and cash management.
“Now we can finally begin to make progress on US regulatory clarity for digital assets with GMAC’s current recommendation on tokenized non-monetary collateral. This marks an important first step towards realizing these opportunities for our derivatives markets – with exactly the same safeguards and protections in place. Adopting new technologies does not mean compromising market integrity.
“I am also excited about the progress of the utility token workflow and their extensive efforts to find a regulatory solution for these key assets that will help unlock rapid innovation and growth in the digital economy. I applaud the leadership of GMAC, the Digital Asset Markets Subcommittee, and the workstreams to promote the competitiveness of our markets and the United States.
Moving forward
The GMAC approved its recommendation without objection, marking a key milestone in regulatory clarity for digital assets in the United States. This recommendation is the 14th GMAC has submitted to the CFTC in the past 12 months, setting a record for the committee.
As part of the CFTC’s broader mission to ensure that U.S. markets remain resilient and competitive in a global context, GMAC also plans to provide other critical information and recommendations on the regulation of fintech and digital assets .
