CFTC chair Selig and Raoul Pal foresee mass tokenization

CFTC Chairman Michael Selig said U.S. financial markets need to prepare for mass tokenization and 24/7 on-chain finance. Raoul Pal said the transformation could extend beyond stocks, bonds and real-world assets. Selig made the remarks at the U.S. Treasury Market Conference on Tuesday. Selig said blockchain could enable near-instant settlement. Selig said blockchain could move collateral in real time across clearinghouses, intermediaries and investors. Selig said regulators need to prepare for a financial system built around blockchain, artificial intelligence and continuous trading. Selig argued that real-world asset tokenization is one of the most important developments. Selig said high-quality tokenized collateral could improve liquidity and market resilience. Selig said the CFTC has expanded eligible tokenized collateral to include certain payment stablecoins. Selig highlighted that crypto and precious metals may be better suited to continuous trading than agriculture, energy and some financial products. On Sept. 22, Pal predicted that everything will become a token. Pal said he first developed the thesis in 2014 when he described blockchain as a potential global ownership ledger. Pal pointed to roughly $300 billion in stablecoins as evidence that traditional finance is beginning to move on chain. Pal pointed to about $14.8 billion in tokenized U.S. Treasury funds as further evidence. Pal defined a token as information that a machine can read, verify, price and trade without human intervention. Pal said tokenization could extend to digital identity. Pal said tokenization could extend to insurance policies. Pal said tokenization could extend to reservations. Pal said tokenization could extend to warranties. Pal said tokenization could extend to property rights and other contracts.