CFTC Chairman Selig says markets must prepare for 'mass tokenization'

The Trump administration is preparing for a financial market overhaul as tokenization, onchain finance, and 24/7 trading move into the spotlight.

Commodity Futures Trading Commission Chair Michael Selig said regulators need to prepare markets for "mass tokenization" while tailoring current markets for new tech such as blockchain and artificial intelligence.

"With developments like tokenization, on-chain finance, and 24/7 trading, the next decade will likely bring more change to financial markets than the previous several decades combined," Selig said on Tuesday during a U.S. Treasury Market conference at the New York Fed.

The U.S. will continue to lead, he said.

"Across the entire Trump administration, we've already laid the groundwork to continue doing so by embracing innovation, encouraging competition, right-sizing regulation and maintaining the trust that has made our markets the gold standard across the world, " he added.

Over the past year, the agency has issued guidance and has sought public comments on 24/7 trading for energy derivatives markets, reflecting its growing interest in round-the-clock markets. Separately, in February, the CFTC expanded its list of eligible collateral to include stablecoins issued by national trust banks.

The CFTC will look to find more ways to "encourage responsible stablecoin adoption for market participants, exchanges, and clearinghouses," Selig said.

Meanwhile, the CFTC's sister agency, the Securities and Exchange Commission, released its long-anticipated "innovation exemption" last week to make room for the onchain trading of tokenized stock. Both agencies are moving ahead after a bill to regulate the crypto industry overall has stalled out in the Senate.