Trump’s election victory revitalizes the push for extensive cryptocurrency reforms
In the wake of Donald Trump’s election as the new US President, regulators are advocating for reforms in the crypto market. This includes initiatives like establishing regulatory sandboxes and allowing tokenized funds’ shares to be used as collateral in traditional derivatives trading.
During an interview on Fox Business, SEC Commissioner Mark Uyeda expressed support for Trump’s stance on ceasing the war on crypto and discussed ways to position the US as a leading player in the global crypto market.
Uyeda emphasized the need for clear regulatory guidelines to determine whether a crypto offering falls under SEC jurisdiction, enabling firms to comply with the rules effectively. He also advocated for the creation of “safe harbors” to foster innovation within the industry.
Additionally, Uyeda highlighted the importance of collaboration between regulators, Congress, and federal agencies to establish a cohesive approach to crypto regulation. When asked about the possibility of him becoming the next SEC Chair, Uyeda stated that it was a decision for the President.
Tokenized funds as collateral
Uyeda’s call for reform aligns with a broader regulatory trend towards crypto and blockchain technology in finance. The CFTC recently endorsed the use of tokenized funds as collateral for derivatives trading.
According to a Bloomberg News report on Nov. 22, the CFTC’s Global Markets Advisory Committee approved the use of tokenized assets, like money-market fund tokens from BlackRock and Franklin Templeton, as collateral.
This recommendation, pending review by the CFTC, underscores the potential of distributed ledger technology to improve collateral management efficiency and transparency. The framework proposed by the advisory panel enables registered firms to handle and transfer tokenized non-cash collateral using DLT while complying with existing margin requirements.
While the recommendations are not binding, the CFTC often integrates advisory input into policymaking due to the committees’ expertise. However, there is no set timeline for the adoption of these recommendations into formal guidance or rulemaking.
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