After the recent election of Donald Trump as the new US President, regulators are now advocating for significant reforms in the crypto market. These reforms range from establishing regulatory sandboxes to allowing tokenized funds’ shares as collateral in traditional derivatives trading.
In an interview with Fox Business, SEC Commissioner Mark Uyeda expressed support for President-elect Donald Trump’s stance on ending the war on crypto in the US. Uyeda emphasized the importance of providing clarity on which tokens fall under SEC jurisdiction and the need for clear guidelines to help crypto firms navigate regulatory requirements.
Uyeda also highlighted the importance of creating “safe harbors,” regulatory sandboxes that allow crypto companies to innovate and experiment with new products. He stressed the necessity for regulators to collaborate with Congress and other federal agencies to develop a cohesive approach to regulating crypto.
With Gary Gensler set to step down as the SEC Chair on Jan. 20, Uyeda was asked about his interest in filling the role. He stated that the decision ultimately lies with the President.
Amidst this push for regulatory reform, the CFTC has recommended using tokenized funds as collateral for derivatives trading. The Global Markets Advisory Committee of the CFTC approved the use of tokenized assets, such as money-market fund tokens from BlackRock and Franklin Templeton, as collateral. This move underscores the potential for distributed ledger technology (DLT) to enhance collateral management efficiency and transparency.
The committee’s recommendation provides a framework for registered firms to hold and transfer tokenized non-cash collateral using DLT while ensuring compliance with existing margin requirements set by the CFTC and other U.S. regulators. Although these recommendations are not binding, the CFTC typically considers advisory input from specialized committees in its policymaking process.
As the regulatory landscape for crypto continues to evolve, these proposed reforms signal a growing acceptance of blockchain technology in finance. It remains to be seen how these developments will shape the future of the crypto market in the US.