The U.S. Commodity Futures Trading Commission (CFTC) has told banks and financial firms they can now hold customers’ money as digital tokens, so long as the tokens act the same way as the underlying cash or securities. The agency also opened the door for firms to keep records on blockchain ledgers instead of paper files.
The guidance, issued Thursday, says the CFTC will not punish firms for putting customer funds into tokenized forms of assets they are allowed to hold. The regulator made one key demand: the tokenized version must grant the holder the same legal and economic rights as the physical form, and the assets must be kept properly.
The CFTC also said agency staff “would not object if a records entity utilized blockchain (or distributed ledger) technologies to create and maintain onchain records and satisfy its recordkeeping obligations.” That applies to any CFTC rule that requires keeping and maintaining records.
The distinction matters. For private networks, firms may not need to keep separate offchain copies of the records. For public, permissionless blockchains, the guidance is tougher: the regulated business “should establish systems and controls that enable it to retain and produce such records under any circumstances, including in the event of an emergency or other disruption to the network.”
The Tokenized Assets Rule
A firm holding customer funds in a tokenized form must ensure the token holder gets the same rights as the holder of the physical asset. The guidance does not define what “functionally equivalent” means in every case.
The Recordkeeping Exception
The CFTC is telling firms they can store regulatory data on a blockchain ledger instead of paper files, and staff will not object to that arrangement.
For private networks, the guidance suggests firms can use the onchain records themselves as the official record, without needing a separate offchain backup. That could save firms significant costs on storage and compliance.
For public blockchains, the requirement is stricter. The firm must build systems that can produce the records even if the network crashes or forks.
Why the CFTC Is Doing This
The CFTC’s chairman, Mike Selig, said in a statement: “I’m pleased to see staff update these frequently asked questions consistent with the agency’s ongoing efforts to provide regulatory clarity for the crypto industry.”
The timing is notable. The Senate’s failure to move the Digital Asset Market Clarity Act left the industry without a national regulatory framework. The CFTC is positioning itself as the crypto-friendly regulator, offering firms a path forward through guidance rather than legislation.
What the Guidance Does Not Cover
The guidance does not address whether firms can hold customer funds in crypto spot markets. That question remains unresolved, pending action on the Digital Asset Market Clarity Act.
The guidance also does not require firms to use blockchain. It only says the CFTC will not object if they do.
The Practical Takeaway
Firms now have a clear path to tokenize customer funds and keep records onchain, so long as they meet the CFTC’s conditions. The guidance removes the fear of penalty for experimenting with new technology.
The public blockchain requirement is a hurdle, but it is one the CFTC has put on the table rather than leaving unaddressed. The agency is asking firms to plan for failure, not assume it won’t happen.
Where the paper stands
The paper backs the small bank and the small financial firm against the CFTC’s guidance, which risks handing the biggest banks an advantage over their smaller rivals by letting them treat customer money as something else entirely. Regulation often ends up protecting the largest players and raising the cost of entry for the smallest, and the CFTC’s guidance looks like another case of that pattern.
The paper supports narrow oversight aimed at actual harm, not broad rulebooks written with the biggest firms in mind. The guidance opens a path for banks to hold customer funds as digital tokens and keep records on blockchain ledgers, but it is the big banks with the capital and the scale who stand to benefit most from treating customer money as something different. The paper sees this as a move by the CFTC toward becoming the crypto-friendly regulator, offering firms a path forward through guidance rather than legislation, and it reads as a bid to fill the gap left by the Senate’s failure to pass the Digital Asset Market Clarity Act.
The paper would want the CFTC to aim its oversight at the harm rather than at the technology, and it would want any rulebook to be narrow rather than broad. The reader should watch for how the guidance plays out in practice, and whether the biggest banks end up using it to gain an edge over their smaller rivals.
Key Facts Box
- Guidance issued: Thursday
- Core rule: Tokenized assets must grant holders the same or functionally equivalent rights as the physical asset
- Recordkeeping: Onchain records allowed for private networks; public networks require systems to produce records under any circumstance
- Failed bill: Digital Asset Market Clarity Act
- CFTC chairman: Mike Selig
The CFTC has shown it is willing to adapt its rules to new technology. Whether that is enough to replace a national regulatory framework is unclear. For now, firms have one less barrier to clearing.
Source material: “U.S. commodities firms can invest in tokenized assets, use blockchain records: CFTC,” CoinDesk.
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