The CFTC report supports the commercial bond market
The Commodity Futures Trading Commission (CFTC) has approved the use of blockchain technology to manage trading in U.S. derivatives markets, according to a November 21 report by the CFTC's Global Markets Advisory Committee.
Blockchain technologies — including distributed ledgers and tokens — could solve long-standing challenges for traditional derivatives exchanges and expand the range of assets available to securities businesses, the report said.
CFTC Commissioner Caroline de Pham said in a statement that “there have been successful and proven business cases for asset manipulation around the world.”
“Now we can finally make progress on the regulatory transparency of US digital assets.”
Among other benefits, blockchain networks “can facilitate real-time, 24/7/365 transmission. [collateral] A property without expensive or complex linkages between multiple intermediaries,” the report said.
“They can also allow peer-to-peer transfers, which means that the person who owns the property can transfer or pledge the property without having to deal through a broker,” he continued.
The Depository Trust and Clearing Corporation (DTCC) is testing transactions on blockchain networks. Source: D.T.C
Related: Trump taps crypto-friendly CFTC chair: Report
Traders are often required to post collateral or “margin” until trades are completed.
The CFTC regulates commodity derivatives markets, such as exchanges, futures and options, and plays a critical role in regulating the US cryptocurrency markets.
How Trump will shape the CFTC's approach to blockchain
US President-elect Donald Trump – who has vowed to turn the US into the “crypto capital of the world” – is reportedly tapping a crypto-friendly commissioner to lead the CFTC when he takes office on January 20, 2025.
Under President Joe Biden, the Securities and Exchange Commission and the CFTC have taken regulatory actions against crypto, leading to hundreds of actions against industry companies.
Summer Merzinger, a Republican CFTC commissioner, is among those considered to lead the agency, urging the regulator to take a more accommodating stance on crypto.
Commissioner Pham criticized the CFTC in September for taking pro-crypto stances, including criticism of Uniswap's operation of an unregistered derivatives exchange.
Is the SEC next to adopt blockchain?
In addition to the CFTC, there will be leadership changes at the SEC. In the year On November 21, SEC Chairman Gary Gensler, known for his strong stance on cryptocurrency regulation, announced his plans to leave the agency on January 20, 2025.
Source: Gary Gensler
Even before the post-election shakeup by the SEC and CFTC, there were signs that regulators and trading platforms were beginning to accept securities for trading.
In September, the Depository Trust and Clearing Corporation—the central securities trading company of the United States—completed a pilot program exploring the use of U.S. Treasury bills as trading margin.
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