1/7 The Commodity Futures Trading Commission's (CFTC) Global Markets Advisory Committee (GMAC) has endorsed a recommendation to expand the use of non-cash collateral through distributed ledger technology (DLT). This initiative aims to modernize U.S. derivatives markets by leveraging blockchain for enhanced efficiency and competitiveness.
2/7 Commissioner Caroline D. Pham highlighted global successes in asset tokenization, such as digital government bond issuances in Europe and Asia, and over $1.5 trillion in institutional repurchase agreements and payment transactions conducted on enterprise blockchain platforms. She emphasized that embracing new technologies like DLT does not compromise market integrity.
#bonds #finance #tokenization
3/7 The GMAC's Digital Asset Markets Subcommittee presented this recommendation, marking the 14th advanced to the CFTC in the past year—a record for any advisory committee within such a timeframe.
#digitalassets #blockchain
4/7 Historically, the CFTC has permitted non-cash assets as collateral for regulatory margin requirements in both cleared and non-cleared derivatives, with conditions to mitigate risks. However, operational challenges have limited their practical use. Integrating blockchain technology is expected to address these challenges by improving the operational infrastructure for assets already eligible as regulatory margins.
#bonds #investment
5/7 Additionally, the GMAC's Digital Asset Markets Subcommittee is developing a regulatory framework for utility tokens—digital assets that provide access to specific products or services within a blockchain ecosystem. This framework aims to enhance innovation and growth in the digital economy by providing clarity and guidance for market participants.
#blockchain #innovation
6/7 Through these initiatives, the CFTC aims to maintain the integrity of the derivatives market while promoting its global competitiveness, positioning the U.S. derivatives market at the forefront of innovation and adaptability in the evolving financial sector.
#web3 #adoption
7/7 Engage the full article here:
https://inleo.io/@uyobong/cftc-committee-endorses-tokenization-of-noncash-collateral-gf4