CFTC and SEC Push Tokenization Forward After CLARITY Act Stalls
Despite the US Senate's rejection of the CLARITY Act earlier this month, both the Commodity Futures Trading Commission and the Securities and Exchange Commission are pressing ahead with tokenization initiatives under existing authority. For accounting firms, CFOs, and auditors with digital asset exposure, that dual-track regulatory push has immediate implications for stablecoin accounting, digital asset classification, and how on-chain market infrastructure will ultimately be governed.
What CFTC Chair Selig Actually Said
Speaking at the US Treasury Market Conference on 23 September 2026, CFTC Chair Michael Selig framed tokenization of real-world assets as a potential structural reset for financial markets, not a distant aspiration. He drew a direct parallel to the shift from open-outcry floor trading to electronic execution, arguing that tokenization could deliver the same order-of-magnitude efficiency gain across all asset classes.
Near-Instant Settlement and Collateral Mobility
The practical case Selig outlined centres on two operational benefits: near-instant settlement and real-time collateral movement. In the current system, collateral sitting in transit between clearinghouses, intermediaries, and end users is a source of both cost and counterparty risk. On-chain settlement, if properly structured, compresses that window dramatically. For firms running treasury operations or posting margin across multiple venues, the accounting implications are significant: shorter settlement cycles change when a trade is recognised as settled, when collateral is derecognised from one party's balance sheet and recognised on another's, and how overnight credit exposures are calculated.
A Principles-Based Regulatory Approach
Selig confirmed the CFTC intends to pursue principles-based rules rather than prescriptive ones as tokenization and on-chain finance evolve. That language matters for compliance teams. Principles-based frameworks place interpretive responsibility on the regulated entity, meaning firms cannot wait for a detailed rulebook before building internal controls. They need to be able to demonstrate, right now, that their treatment of tokenised assets is consistent with the spirit of CFTC oversight even before specific rules are finalised.
Selig had already signalled in August that the CFTC would act under existing authority if Congress failed to pass the CLARITY Act. On 17 September 2026, the CFTC submitted a pre-rule filing covering crypto asset transactions and markets for White House review. The filing remains at the pre-rule stage, meaning no specific regulatory text has yet been published, but the signal is unambiguous: rulemaking is underway regardless of Congressional action.
The CLARITY Act Setback and What It Changes
The Senate voted on 15 September 2026 not to advance the CLARITY Act, a bill that had sought to draw clearer jurisdictional boundaries between the CFTC and the SEC over digital assets. Its failure does not freeze the regulatory clock. It simply means both agencies must now operate within their existing statutory mandates rather than under a new legislative framework designed specifically for crypto.
Jurisdictional Ambiguity Persists
Without the CLARITY Act, the longstanding question of whether a given digital asset is a commodity or a security remains unresolved at the legislative level. That ambiguity is not academic. It affects which ruleset a firm must comply with, which regulator it reports to, and how it classifies assets on the balance sheet. A tokenised Treasury bill is almost certainly a security; a tokenised commodity futures contract sits clearly with the CFTC; but a tokenised fund unit, a tokenised receivable, or a stablecoin backed by a diversified reserve pool? Those remain contested territory.
For accounting purposes, the classification question feeds directly into measurement. An asset treated as a financial instrument under ASC 310 or ASC 320 carries different recognition and disclosure requirements than a commodity position under derivatives guidance, and different again from a crypto asset measured at fair value through profit and loss under the FASB's ASC 350-60 framework that took effect for calendar-year filers in 2025.
The SEC's Parallel Track
SEC officials have been equally active. Jamie Selway, Director of the SEC's Division of Trading and Markets, told Bloomberg TV that tokenization and crypto have become politically charged topics but are, in his assessment, not inherently political from a market structure standpoint. That framing is notable: it suggests the SEC's market structure team views on-chain markets as a technical evolution of existing market infrastructure rather than an ideological pivot.
The Exemption Pathway
SEC Chair Paul Atkins stated in February 2026 that an exemption mechanism could allow on-chain trading to proceed while longer-term rules are developed. That exemption approach mirrors how the SEC has historically handled novel trading venues: grant a time-limited exemption with conditions, gather live market data, then formalise rules based on observed behaviour. For firms considering launching or accessing tokenised securities platforms, an exemption regime means operational activity can begin earlier, but it also means the compliance framework is provisional and subject to revision.
Accounting for Tokens Issued Under an Exemption
Where a tokenised security is issued or traded under an SEC exemption, the accounting treatment must still follow the underlying economic substance. The token wrapper does not change whether an instrument is debt, equity, or a derivative. Firms need clear policies establishing that classification happens at the instrument level, not the technology level. Auditors reviewing digital asset portfolios in 2026 should be asking explicitly whether any tokenised positions have been reclassified in a way that does not reflect the contractual rights of the holder.
Stablecoin Accounting in a Tokenised Market
Stablecoins sit at the centre of any mass-tokenization scenario because they are the settlement layer. If near-instant settlement becomes standard for tokenised RWAs, the on-chain cash leg will almost certainly be a stablecoin, whether a regulated bank-issued stablecoin, a payment stablecoin like USDC, or eventually a wholesale central bank digital currency.
How Stablecoins Appear on the Balance Sheet
Under current US GAAP, most stablecoins held by a corporate entity are treated as intangible assets under ASC 350-60 and measured at fair value, with gains and losses recognised in net income each period. That treatment applies to coins like USDC that maintain a stable peg. The practical volatility is minimal, but the disclosure requirements and the need for a robust fair value methodology are not. Firms holding stablecoins as part of a treasury or settlement operation need a documented valuation policy, a clear definition of the principal market, and controls over how balances are reconciled to on-chain data.
Collateral Movement and Derecognition
Selig's specific reference to real-time collateral movement between clearinghouses and intermediaries raises a derecognition question that firms should be addressing now. When tokenised collateral moves on-chain in near real time, at what point does the transferor lose control sufficient to derecognise the asset? Under ASC 860 on transfers of financial assets, derecognition requires surrender of control, including the absence of a continuing involvement that constrains the transferee. Smart-contract-based collateral arrangements may create conditional return rights that prevent clean derecognition, leaving the asset on both parties' balance sheets simultaneously under different frameworks. That is not a theoretical edge case; it is a live accounting question for any firm piloting on-chain margin or repo.
Practical Implications for Accounting Firms and CFOs
The dual-agency push, the pre-rule CFTC filing, and the SEC's exemption pathway collectively mean that the operational and accounting environment for digital assets is shifting faster than legislative timelines. Firms that wait for a final rulebook before updating policies will find themselves behind on multiple fronts.
What Firms Should Be Doing Now
First, map existing digital asset holdings against the current CFTC and SEC jurisdictional frameworks. Even without the CLARITY Act, the agencies' existing guidance provides a baseline. Second, review stablecoin accounting policies to confirm they are aligned with ASC 350-60 and that fair value measurement is documented with a defensible methodology. Third, assess any tokenised asset positions for derecognition risk, particularly where smart contracts impose conditions on transfer. Fourth, monitor the CFTC's pre-rule filing as it progresses through White House review: the first substantive regulatory text will signal which market segments face the most immediate compliance change. Fifth, ensure that crypto accounting software used internally or recommended to clients can capture on-chain settlement data with sufficient granularity to support both tax reporting and financial statement audit trails.
The CLARITY Act's Senate defeat was a setback for legislative certainty, but it was not a pause in regulatory direction. Both the CFTC and SEC are moving, and the firms that build adaptable internal frameworks now will be better placed when final rules arrive.
Frequently Asked Questions
Does the CFTC's pre-rule filing create any immediate compliance obligations?
Not directly. A pre-rule filing signals that rulemaking is being considered and allows the White House's Office of Information and Regulatory Affairs to review the agency's intentions, but it does not publish binding regulatory text. Firms are not yet required to comply with any new CFTC crypto-specific rules arising from this filing. However, the filing confirms the direction of travel, and firms should begin gap analyses against likely requirements rather than waiting for a final rule.
How should a corporate treasury classify USDC held for settlement purposes under US GAAP?
Under ASC 350-60, USDC and similar stablecoins are generally treated as crypto assets measured at fair value, with changes recognised in net income. They are not cash or cash equivalents unless specific conditions are met. The stable peg limits fair value volatility, but the accounting classification, disclosure requirements, and need for a documented measurement methodology remain. Firms should ensure their accounting policy explicitly addresses stablecoins held for operational settlement and distinguishes them from speculative holdings.
What is the key accounting risk when tokenised collateral moves on-chain in real time?
The primary risk is incorrect derecognition. Under ASC 860, a financial asset can only be derecognised when control is surrendered without continuing involvement that constrains the transferee. Smart-contract collateral arrangements often include conditional return mechanics that may preserve the transferor's effective control. Firms need legal and accounting analysis of the specific contract terms before concluding on derecognition, and auditors should be requesting that analysis as part of year-end procedures.
If the CLARITY Act is dead, how do firms know which regulator governs a given tokenised asset?
Without legislative clarification, firms must rely on existing agency guidance and case law. The CFTC's jurisdiction covers commodity derivatives and spot commodities to a limited extent; the SEC's covers securities broadly defined under the Howey test. For tokenised instruments, the analysis starts with the underlying asset and the contractual rights of the token holder. Where genuine ambiguity exists, firms should document their classification rationale carefully and consider seeking a no-action letter or informal guidance from the relevant agency.
How does the SEC's exemption approach affect audit procedures for tokenised securities?
An exemption permits certain activities that would otherwise require full registration, but it does not alter the underlying accounting treatment of the instrument. Auditors reviewing tokenised security positions should still assess classification, measurement basis, and disclosure completeness as if the instrument were a traditionally issued security. The exemption is a regulatory permission, not an accounting standard. Firms should also retain documentation of the specific exemption relied upon, as this will be relevant to any future regulatory examination.
Source: Cointelegraph