The Commodity Futures Trading Commission (CFTC) has backed blockchain technology and tokenization as a way to improve trading collateral management in a new report. The report, published on November 21 by the Global Markets Advisory Committee, says this technology can solve traditional challenges in financial markets and open up new opportunities.
What is tokenization, and why is it important?
Tokenization makes it possible to trade assets, such as stocks or bonds, digitally on a blockchain. This offers great advantages:
- Fast transactions: Blockchain makes it possible to transfer assets instantly 24/7, without expensive intermediaries.
- Direct ownership: Tokenization lets traders move or pledge their assets instantly, without a broker.
- More trading collateral options: Using digital tokens as collateral can make the system more flexible.
CFTC Commissioner Caroline D. Pham emphasizes the importance of these developments: “There are already successful examples of tokenization around the world. Now we can finally take steps to provide greater clarity on digital asset regulation in the US.”
Blockchain already in use
In practice, blockchain is already being tested as a tool for trading collateral. In September, the Depository Trust and Clearing Corporation (DTCC) completed a test using digital versions of U.S. Treasury bonds as collateral for transactions. This shows that tokenization is not just theory, but can also work in practice.
Future of crypto regulation
The CFTC is an important regulator in the American financial markets, including cryptocurrency. With the upcoming change in the presidency on January 20, 2025, attitudes towards crypto are expected to change. President-elect Donald Trump has announced plans to make the US the “crypto capital of the world.”
There is speculation that Trump will appoint a more crypto-friendly commissioner to head the CFTC. Names mentioned are Summer Mersinger, who previously advocated a more flexible approach to crypto, and Caroline D. Pham, who has long been calling for clear regulations.
A look at the future
The CFTC’s new report highlights that blockchain and tokenization can help make financial markets more modern and efficient. This is an important step towards innovation in the traditional financial world and offers hope for greater clarity around digital assets in the United States.
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Source: https://newsbit.nl/cftc-steunt-blockchain-snellere-handel-en-minder-tussenpersonen-in-zicht/
