In a move aimed at boosting portfolio diversification for investors and improving capital efficiency for fund managers, a subcommittee of the Commodity Futures Trading Commission (CFTC) has advanced its recommendations on the application of distributed ledger technology (DLT) in managing non-cash collateral, reports AMB Crypto.
These guidelines, which focus on enabling registered firms to leverage DLT for holding and transferring tokenized assets, mark a critical step toward integrating blockchain solutions within traditional financial infrastructure. The recommendations have been passed to the full committee for further review. The initiative gained traction following reports by Bloomberg.
CryptoSlate further stated that funds such as BUIDL and FOBXX could be approved as collateral in 2024 in the US traditional finance market.
This highlights the push to utilize tokenized shares of money-market funds from major financial institutions like BlackRock and Franklin Templeton as collateral in trading activities. The subcommittee pushing these advancements includes members like Citadel, Bank of New York Mellon, and Bloomberg, further underscoring the momentum behind tokenization in traditional financial sectors.