Trump’s election win revives push for comprehensive crypto reforms

Commissioner Mark Uyeda defends the creation of regulatory sandboxes, as a CFTC committee advises usage of tokenized funds’ shares as collateral for derivatives trading.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Following Donald Trump’s election as the new US President, regulators are pushing for crypto market reforms, from establishing regulatory sandboxes to allowing tokenized funds’ shares as collateral in traditional derivatives trading.

During an interview for Fox Business, SEC Commissioner Mark Uyeda said 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:

“First off, from a regulatory perspective, we can provide proper clarity. Some crypto is not even a security at all, but we need to make it clear whether or not you would fall within SEC jurisdiction or not.”

If a token offering falls under the SEC’s jurisdiction, clear guidelines are necessary so crypto firms can decide the right course of action to comply with the regulator’s rules.

Uyeda also defended the creation of “safe harbors,” which are regulatory sandboxes where crypto companies could experiment with different products, allowing “innovation to occur.”

The SEC Commissioner also argued that regulators must work with Congress and other federal agencies to create a cohesive approach to crypto.

Lastly, considering Gary Gensler will step down as the SEC Chair on Jan. 20, Uyeda was asked if he is interested in filling the role, and he answered that this is a decision for the President.

Tokenized funds as collateral

Uyeda’s call for reform comes amid a wider regulatory shift toward crypto and blockchain technology in finance. The CFTC recently recommended using tokenized funds as collateral.

Bloomberg News reported on Nov. 22 that the Global Markets Advisory Committee of the Commodity Futures Trading Commission (CFTC) approved using tokenized assets, such as money-market fund tokens launched by BlackRock and Franklin Templeton, as collateral for derivatives trading.

The committee’s recommendation, which now awaits review by the CFTC, highlights the potential for distributed ledger technology (DLT) to enhance the efficiency and transparency of collateral management.  

The advisory panel’s recommendation provides a framework for registered firms to hold and transfer tokenized non-cash collateral using distributed-ledger technology. The framework ensures compliance with existing margin requirements set by the CFTC, other U.S. regulators, and derivatives clearing organizations.  

Although the recommendations are not binding, the CFTC frequently incorporates advisory input into its policymaking due to the committees’ specialized expertise. However, there is no specific timeline for when or whether the CFTC will adopt these recommendations into formal guidance or rulemaking.

Mentioned in this article