U.S. commodity companies can invest in tokenized digital assets and use blockchain ledgers: CFTC

What's going on?

The U.S. Commodity Futures Trading Commission (CFTC) issued an updated guidance on Thursday, informing CFTC-regulated platforms that it is possible to invest customer funds in tokenized forms of already authorized assets while also confirming that blockchain technology can be used as a formal record system.

What's the key condition?

The CFTC states that regulatory agencies must ensure "that tokenized assets provide holders with legal and economic rights equal to or functionally equivalent to those enjoyed by traditional asset owners" and that the assets are properly maintained.

The use of blockchains to store data.

Additionally, the CFTC added an issue about using blockchains as official transaction logs, stating that agency officials "will not object if a record-keeping entity uses blockchain (or distributed ledger) technology to create and maintain records on the chain in order to comply with its duty of care", which effectively encompasses all CFTC provisions related to record keeping and data management.

Why is this important?

This approach undermines the CFTC's openness to crypto and blockchain activity in derivatives markets. Previously, financial institutions seeking tokenization often struggled with whether digital assets that reference real-world assets could be considered "qualified" and whether records on blockchains would count as legal evidence. The new guidance addresses both issues in a more enabling way.

For investors and users in Thailand, this trend implies that large institutions in the US may be issuing more tokenized products which will affect the quality and format of products flowing to global markets as well as being a key reference point for regulatory agencies in regions like the SEC (Thailand) Thai when considering future regulations on digital assets.