CFTC offers ‘regulatory clarity for crypto’ without approving BTC or ETH investments

The U.S. Commodity Futures Trading Commission (CFTC) has come up with its latest update around bringing tokenization and blockchain-based infrastructure closer to the existing regulatory framework.

Instead of creating an entirely new set of rules for crypto the CFTC’s Market Participants Division (MPD), Division of Market Oversight (DMO), and Division of Clearing and Risk (DCR) updated their FAQs to address two specific issues.

The first being whether customer funds can be invested in tokenized versions of investments that are already permitted under CFTC rules. And the second one involves whether regulated firms can use blockchain technology to meet their recordkeeping obligations.

Remarking on the same, CFTC Chairman Michael S. Selig said,

I’m pleased to see staff update these frequently asked questions consistent with the agency’s ongoing efforts to provide regulatory clarity for the crypto industry.

CFTC’s updated rule for assets in tokenization

That said, in its updated FAQs, the CFTC clarified that assets already permitted under its rules can be held in tokenized form.

This means traditional assets such as U.S. Treasuries, corporate bonds or money-market fund shares can potentially be represented as blockchain-based tokens, provided the token gives holders the same legal and economic rights as the traditional asset.