Crypto23 September, 20262 min read
CFTC Chair Michael Selig Says Mass Tokenization Could Reshape Onchain Markets
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Mass tokenization could reshape financial markets, says CFTC Chair Michael Selig. Regulators are adapting frameworks for blockchain and onchain markets despite CLARITY Act setbacks.
Regulators push tokenization
US Commodity Futures Trading Commission Chair Michael Selig said financial markets should prepare for "mass tokenization" as regulators adapt existing frameworks for blockchain, artificial intelligence and onchain markets.
Selig said tokenization of real-world assets (RWAs) could become the foundation of a more efficient financial system, enabling near-instant settlement and real-time collateral movement between clearinghouses, intermediaries and users.
Selig added, "Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes," while the CFTC pursued principles-based rules as tokenization and onchain finance evolve.
The Senate failed to advance the CLARITY Act on Sept. 15, and the CFTC submitted a regulatory action covering crypto asset transactions and markets for White House review on Sept. 17.
The SEC granted a temporary "Innovation Exemption" for tokenized US stock trading on Sept. 17, letting certain platforms trade digital versions of US-listed stocks under certain conditions.
Market rally after exemptions
Crypto tokens linked to trading and tokenization rallied after US regulators moved to broaden digital asset markets despite the failure of the Clarity Act in Congress. Hyperliquid’s HYPE token hit a record high of $96 on Monday, pushing its market value above $200 billion, while Uniswap’s UNI token rose about 40% over the past week. Avalanche’s AVAX gained around 47%, Ethena’s ENA about 50%, and Ondo’s ONDO roughly 26% as the SEC granted a five-year exemption allowing compliant platforms to trade tokenized U.S. equity on the blockchain.
Ayesha Kiani, chief operating officer of Monarq Asset Management, said, "we’re seeing the SEC and CFTC act more forcefully within their current jurisdictions to provide a regulatory framework for the sector," and she added, "This does not replace the solidity of legislation, but it does inject greater confidence into the market". Carlos Guzmán, vice president of research at GSR, said, "The rally is occurring amid a broader shift toward risk appetite," and he tied the shift to technology stocks rising after the Fed signaled it would raise interest rates.
Tokenized stocks expand
Blockchain.com and NYSE explored 24/7 tokenized stock trading through an agreement that would connect the crypto platform to NYSE’s planned digital venue. The agreement would add two-way distribution of stock and crypto market data, according to The Defiant. In parallel, the CFTC chair described tokenization as a way to move collateral in real time between clearinghouses, intermediaries and users.
The SEC’s temporary "Innovation Exemption" for tokenized US stock trading created a pathway for platforms to trade digital versions of US-listed stocks under certain conditions. Joshua Lim, FalconX co-CEO and global head of markets, said the SEC exemption "creates a regulatory-compliant pathway for market makers to provide liquidity to tokenized securities," as the market rotated toward networks like Avalanche.