Modernizing Capital Markets: The CFTC’s New Initiative on Tokenized Collateral

And Well, the CFTC launching a new initiative to allow tokenize collateral, including stablecoins in derivatives markets.

Now this move announced by acting chair Carolyn Pham stems from a recommendation by the CFTC's Global Markets Advisory Committee to expand the use of non-cash collateral through DLT, and it's part of a broader effort to modernize capital markets and provide clear guidance for crypto firms.

Building on the agency's cryptosprint to implement presidential recommendations, and this does come at a time of regulatory agencies, including the Treasury Department, still working to implement the Genius Act, the first crypto-specific bill passed by Congress to regulate stablecoins.

Well joining me here at the New York Stock Exchange this morning is Dante Desparte, chief strategy officer and head of global policy and operations at Circle.

Dante, welcome back.

Thank you so much for joining me.

Thank you, Remy.

It's great to be with you.

Well, what a year it's been 2025.

We're about to head into the final quarter of this year and given that circle went public, you've been dealing with a lot.

But of course when it comes to the latest CFTC initiative, what do you make of this and what does this mean for derivatives markets?

Well, in some respects, the CFTC initiative pronounced by acting acting chair Caroline Pham.

This is a transatlantic echo.

So this notion of modernizing markets and bringing stablecoins into the perimeter of real world capital markets activity is not only going to unlock the full potential of this innovation, for a long time, stablecoins are seen primarily as an extension of payments and banking, but their use in capital markets, I think, is a big opportunity to modernize markets generally.

The reason I say that's a transatlantic echo is because recently we of course had a US state visit to the United Kingdom.

The Treasury Secretary Scott Besant and the Chancellor of the Exchequer Rachel Reeves announced a new task force between the United States and the UK on modernizing markets as well.

We think that's an important opportunity not just to create harmonization across the Atlantic, but of course want to lock these new innovations in financial services as we continue to watch these innovations, I do want to get your Take on the regulatory landscape on the side of the Atlantic in the US.

So on the heels of the Genius Act as we head into the final quarter of this year, what are your expectations?

And of course as we head into 2026, we will be keeping an eye on legislation.

So give us your take on what is needed, what is expected.

Sure, I mean, I think for now the Genius Act of course has been passed into law.

July 18th.

Now we're in the rulemaking process, and Treasury is not wasting any time.

There's two open consultations that the Treasury Department is leading right now.

The first one, I think, is on a very critical topic of financial crime compliance and how to ensure that stablecoin issuers are on a level playing field to their peers in banking and payments.

So Circle and other companies of course are going to contribute to that consultation.

And then the second one that is also out is looking at again how does this translate from law to the regulatory rulebook and ultimately the supervisory supervisory manual.

So you can see a lot of changes in market conduct, a lot of changes, of course, in institutional adoption are all playing out as we speak, even though the Genius Act is now moving into this rulemaking phase.

And Dante, we are here at the New York Stock Exchange, and there have been a lot of headlines about publicly traded companies, household names, as well as financial institutions thinking about stablecoins.

So when it comes to the battle for the future of payments and branded chains, what do you expect to see?

Will this actually drive innovation or not?

Yeah, it's a very good question, and It is of course exciting for me to be back here.

I was honored to meet the South Korean president and the delegation that is visiting the New York Stock Exchange.

Of course, because there is a law, there would imply a lot of institutional interest in adoption.

A lot of companies are weighing important questions about build, buy, or partner.

In our view, and frankly, if you look at the law on both sides of the Atlantic, the Genius Act and the European Framework Markets and Crypto assets framework, MIA.

Um, the likelihood of vanity coins taking off or branded stablecoins taking off seems very low.

There's a lot of regulatory reasons why that would be the case, but also the fact is today's generation of regulated stablecoins already bringing millions of end users.

They're open.

They're composable, they're programmable, and it's the equivalent of launching an alternative to the visa network to consider creating a branded stablecoin in this market environment.

So despite the fact that you have legal clarity to launch stablecoins, there's a lot of. rails in each of these new laws to prevent commerce and banking merging under the stablecoin design.

And of course the stablecoin infrastructure itself is an entrepreneurial innovation.

Think of it like financial services shareware.

All of the infrastructure supporting USDC, the multi-chain environment, the stablecoin itself is designed so that all of the cost of building that infrastructure is borne by circle, but the broader market can now build with trust, safety and transparency at scale.

Without having to be the stablecoin issuer themselves, and Dante, you have a lot of conversations with stakeholders, not just in the US but also overseas.

And given Circle's recent expansion, give us an idea of what's happening outside of the country.

Yeah, well, for one, I mean, there's an extraordinary amount of enthusiasm.

The United States has finally taken its seat at the table in regulating this novel market and so of course it's encouraging even in the Genius Act itself, it's an explicit requirement.

That the Treasury Department seek out reciprocity and regulatory harmonization.

It's not lost on us, of course, that the Treasury Secretary's visit to the United Kingdom is in that exact spirit.

We're also hoping to see much more pass portability of these rules around the world.

There's a lot more in common with the Genius Act and MICA, for example, today in meeting the South Korean delegation here on the New York Stock Exchange floor, there's a lot of interest in South Korea and many other markets in harmonizing their rules set for this innovation.

And now they have a rule set to look to in the United States as a possible framework.

So it's very exciting, a lot of development around the world.

Yeah.

And while we're looking at global policy, the UN General Assembly is taking place in New York City, and you're based out of Washington DC, so here you are on Wall Street, the intersection of policy, money, as well as the future of digital payments.

So as you head into your end and of course the new year, what are you most excited about and why, Dante?

Yeah, I mean, I think for one we We have the wind in our sails broadly as an economy.

I think there's more to be optimistic about, frankly, in in looking ahead into the 2026 and beyond.

A lot of the presidents and the delegations that are here at the United Nations General Assembly are singing a slightly different tone.

We're not totally dominated by doom and gloom in both politics nor in markets, and so in sense we have something to look forward to.

You heard it recently, of course, from President Trump around the idea that the conflict in Europe can now enter a new defining phase in which hopefully we can look to 2026 as a year for peace.

So there's a lot to look forward to in the new year, and frankly, the end of the year is my favorite time of year anyway because you could reflect on what lies ahead and what we have just been through.

OK, Dante, well, always great having you on the show here at the New York Stock Exchange.

Thank you so much for joining me and as always, thank you for sharing all of your insights.

Thank you.

Thank you.