The CFTC Global Markets Advisory Committee (Global Markets Advisory Committee) recently voted and passed a proposal to allow the use of tokenized assets as non-cash collateral for derivative transactions, and the proposal will be submitted to the CFTC for further discussion.
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ToggleCFTC Advisory Committee Votes to Pass, Tokenized Assets as Collateral Preliminarily Affirmed
According to reports, the CFTC Global Markets Advisory Committee (Global Markets Advisory Committee) officially voted on 11/22 to pass the recommendation to use tokenized assets as non-cash collateral, and the proposal will be submitted to the full CFTC Commission for further review.
The purpose of this proposal is to allow registered entities to use distributed ledger technology (DLT) to hold and transfer non-cash collateral. Although this proposal has not yet become a formal regulation, the professional opinions provided by the advisory committee are often used by the CFTC as a basis for formulating regulations. The CFTC has not yet announced a specific time for adopting the recommendations.
Tokenized Assets Expected to Improve Market Efficiency, Becoming a Mainstream Asset Class
This proposal applies to current policies that comply with CFTC and other regulatory agencies' as well as futures exchanges' margin requirements. Assuming that tokenized assets can be officially adopted in the future, it will help improve the efficiency of capital operations and attract more market participants to use digital assets as collateral.
According to estimates by the veteran consulting firm McKinsey & Company, the tokenized market (excluding stablecoins) could reach a total market value of $2 trillion by 2030, with applications covering mutual funds, bonds, exchange-traded instruments, loans, securitized assets, and alternative funds.
BlackRock Tests the Waters, Continues to Explore the Feasibility of Tokenized Collateral
Currently, crypto players including Hidden Road and FalconX have also started accepting BlackRock's BUIDL token as collateral for crypto derivative transactions, providing preliminary validation cases for the market.
In summary, if the CFTC ultimately adopts the advisory committee's proposal to use tokenized assets as collateral for derivative transactions, it not only can improve market efficiency, but may also drive the application of tokenized assets in other financial fields.
