TL;DR
- Tokenization: The CFTC says customer funds may be invested in tokenized versions of already-permitted assets when holders receive legal and economic rights equivalent to those attached to the traditional asset form.
- Records: Regulated entities can use blockchain or distributed ledger technology for onchain regulatory records, although public permissionless networks require systems that preserve access during emergencies, disruptions, or other circumstances affecting the network.
- Policy: The guidance follows the Senate’s failure to advance the Digital Asset Market Clarity Act, which would have created an industry regulatory regime and given the agency authority over crypto spot markets in the United States.
The CFTC has updated its guidance for regulated derivatives firms, opening the door to tokenized versions of already-permitted assets and blockchain-based regulatory records. Under the new position, customer funds may be invested in a tokenized asset when it qualifies as permissible and gives holders legal and economic rights that are the same or functionally equivalent to its traditional form. The move adds another crypto-friendly policy update as the agency works to clarify how existing rules apply to digital markets.
CFTC Opens Door to Tokenized Permissible Assets
The CFTC said firms under its oversight can invest customer funds in tokenized forms of assets already allowed by existing requirements. Companies must ensure the tokenized version provides equivalent legal and economic rights and that the assets are properly held. That approach treats tokenization as a change in form rather than a reason to exclude an otherwise permissible asset.
The CFTC guidance gives regulated firms a clearer path for using tokenized assets within established requirements for customer funds. The update forms part of a faster policy push at the agency, which has been revisiting existing regulations with a more crypto-friendly view and developing new rules. CFTC Chairman Mike Selig said the revised frequently asked questions support the agency’s effort to provide greater regulatory clarity for the crypto industry.
Blockchain Records Gain Regulatory Acceptance
The CFTC also said staff would not object to regulated entities using blockchain or distributed ledger technology to create and maintain onchain records for regulatory obligations. The position applies across CFTC rules involving recordkeeping and the maintenance of regulatory data. Private networks may allow firms to operate without maintaining separate offchain versions. For public, permissionless blockchains, businesses should establish systems and controls that let them retain and produce records under any circumstances, including emergencies or network disruptions.
Policy Push Follows Senate Setback
The guidance comes after the U.S. Senate failed last week to advance the Digital Asset Market Clarity Act. The proposed legislation would have established a U.S. regulatory regime for the industry and granted the CFTC authority over crypto spot markets, an area described in the supplied material as a regulatory gap. Even without that legislation advancing, the CFTC continues using guidance and policy updates to define how regulated firms can incorporate tokenized assets and blockchain infrastructure into existing derivatives requirements.
