Following the election of Donald Trump as the new US president, regulators are pushing for crypto market reforms, from setting up regulatory sandboxes to allowing shares of tokenized funds as collateral in traditional derivatives trading.
During an interview for Fox Business, SEC Commissioner Mark Uyeda said that President-elect Donald Trump is right about stopping the war on crypto in the US. He also commented on what could be done to make the country a leader in the global crypto market
According to Uyeda:
“Firstly, we can provide the right clarity from a regulatory perspective. Some cryptocurrencies are not security at all, but we need to make it clear whether or not you fall under the jurisdiction of the SEC or not.”
If a token offering falls under the jurisdiction of the SEC, clear guidelines are needed so that crypto companies can decide the appropriate course of action to comply with the regulator’s rules.
Uyeda also defended the creation of “safe havens,” which are regulatory sandboxes where crypto companies can experiment with different products, allowing “innovation to happen.”
The SEC commissioner also argued that regulators should work with Congress and other federal agencies to create a cohesive approach to crypto.
Finally, Uyeda was asked if he was interested in filling the role since Gary Gensler will step down as SEC chairman on January 20. He responded that this is a decision for the president.
Tokenized funds as collateral
Uyeda’s call for reform comes amid a broader regulatory shift towards crypto and blockchain technology in the financial world. The CFTC recently recommended using tokenized funds as collateral.
Bloomberg News reported on November 22 that the Commodity Futures Trading Commission’s (CFTC) Global Markets Advisory Committee approved the use of tokenized assets, such as money market fund tokens launched by BlackRock and Franklin Templeton, as collateral for derivatives trading..
The committee’s recommendation, now awaiting review by the CFTC, highlights the potential of distributed ledger technology (DLT) to improve the efficiency and transparency of collateral management.
The advisory panel’s recommendation provides a framework for registered companies to hold and transfer tokenized non-cash collateral using distributed ledger technology. The framework ensures compliance with existing margin requirements of the CFTC, other US regulators and derivatives clearing organizations.
Although the recommendations are not binding, the CFTC regularly integrates advice into its policymaking because of the specialized expertise of the committees. However, there is no specific timeline for when or if the CFTC will adopt these recommendations into formal guidance or regulations.