CFTC can regulate crypto without new laws, Pham says

Former Commodity Futures Trading Commission (CFTC) acting chair Caroline Pham has argued that existing U.S. commodity laws already give the regulator extensive authority over cryptocurrency markets, following the agency’s October 5 proposal for a federal framework covering leveraged retail crypto trading.

According to Pham, who discussed cryptocurrency regulation during an interview at TOKEN2049 Singapore, the Commodity Exchange Act gives the CFTC jurisdiction over a wide range of commodities without requiring Congress to pass an entirely new law. Now serving as MoonPay’s chief legal officer and chief administrative officer, Pham described the regulator’s recent proposals as a way to improve protections for American retail traders. Her comments came after the CLARITY Act failed to advance in September, leaving federal regulators to pursue existing legal powers while lawmakers consider further legislation.

CFTC already has powers to regulate crypto, Pham argues

Pham based her argument on the Commodity Exchange Act, which defines commodities broadly enough to cover goods, services, rights and financial interests that can be traded through derivatives contracts. The law contains two unusual exclusions: onions and movie box office receipts. According to Pham, the definition gives the CFTC enough flexibility to address cryptocurrency markets and emerging financial products without waiting for Congress to create an entirely new regulatory system.

The CFTC’s official glossary confirms that onions and motion picture box office receipts are excluded from the legal definition of a commodity. However, the definition of an asset as a commodity does not automatically give the agency unrestricted authority over every transaction involving that asset. The CFTC’s existing powers differ depending on whether an activity involves derivatives, fraud, market manipulation or certain leveraged retail transactions.

Pham maintained that the agency’s principles-based regulatory system was designed to adapt to new markets, including products that did not exist when the legislation was written. She identified artificial intelligence computing capacity as one example, explaining that financial companies could eventually develop derivatives linked to demand for computing resources. Her argument was that the existing framework could accommodate such products without requiring separate legislation for each new commodity.

The former acting chair’s position comes as current CFTC Chairman Michael Selig pursues additional cryptocurrency rules under the same legislation. Selig has acknowledged that congressional action would be necessary to require all cryptocurrency exchanges to register with the commission. However, he has argued that existing law permits the agency to create a federal registration option for businesses offering particular forms of retail crypto trading.

CFTC proposes new protections for U.S. crypto traders

On October 5, the CFTC announced an advance notice of proposed rulemaking concerning Regulation Crypto Asset Transactions, known as Regulation CTX, and Regulation Crypto Asset Markets, or Regulation CAM. The proposal focuses on leveraged, margined and financed retail cryptocurrency transactions covered by Section 2(c)(2)(D) of the Commodity Exchange Act. The agency is seeking public feedback before developing the detailed requirements of its proposed framework.

Under the approach described by Selig, eligible cryptocurrency businesses could seek federal oversight through a registered trading venue. Firms operating only certain retail crypto transaction services could apply for a new category of designated contract market, while established CFTC-regulated exchanges could offer the products under tailored rules. The proposal is intended to establish standards for trading platforms and provide a federal alternative to some state-level licensing arrangements.

Pham welcomed the initiative, saying stronger exchange supervision could offer better protection than the existing collection of state and federal requirements. She described the proposed framework as “absolutely the kind of protection” U.S. retail cryptocurrency traders should receive. The former official argued that customers would benefit from access to properly supervised markets instead of relying on trading arrangements governed by different state requirements.

The latest rulemaking follows the Crypto Sprint initiative that Pham introduced while serving as acting chair in August 2025. The program sought to implement recommendations from the President’s Working Group on Digital Asset Markets and coordinate regulatory developments with the Securities and Exchange Commission. In its original announcement, the CFTC identified spot cryptocurrency trading, around-the-clock markets and perpetual derivatives among the areas receiving attention.

Pham said the latest proposals build on the agency’s efforts to permit spot cryptocurrency trading through CFTC-registered exchanges. She pointed to provisions introduced through the 2010 Dodd-Frank Act that brought certain leveraged retail commodity transactions under federal requirements. Those provisions form part of the legal basis for the new framework, although the October proposal remains at an early rulemaking stage and does not establish final obligations for trading platforms.

Pham says wholesale markets need tokenized bank deposits

Beyond cryptocurrency regulation, Pham questioned whether stablecoins could meet the settlement needs of large financial institutions. She estimated that settling an entire trading day’s obligations immediately on a blockchain could require approximately $15 trillion in available cash. The figure represents her assessment of the liquidity needed under that hypothetical arrangement and has not been established as an official requirement by the CFTC or another regulator.

According to Pham, traditional financial institutions manage large transaction volumes through net settlement, which allows banks and counterparties to offset what they owe one another before transferring the remaining balances. Replacing that arrangement with immediate settlement of every transaction could require substantially more liquidity. She argued that tokenized bank deposits could preserve existing banking relationships while allowing blockchain technology to support payments and transfers between financial institutions.

Tokenized deposits represent commercial bank money recorded through digital systems, including blockchains. Under the model described by Pham, banks would continue managing customer deposits while using tokenized records to support transactions and settlement. She predicted that such instruments would become “absolutely necessary” for wholesale financial markets because they could work within existing banking structures.

Stablecoins, meanwhile, would remain useful for different types of transactions, according to her assessment. Pham identified payments between parties that do not know or trust each other as one application, particularly when participants want the transfer of an asset and its payment to happen simultaneously. Her comments distinguished the two technologies by their expected uses, without suggesting that either system had already replaced existing wholesale settlement arrangements.

The former official’s current employer, MoonPay, has been expanding its institutional cryptocurrency services. In June 2026, the company launched MoonPay Trade, a platform intended to give financial institutions access to blockchain networks, tokenized assets and digital asset settlement services. Pham described the product as infrastructure supporting institutional activity across multiple blockchain systems.

NYSE and Nasdaq could expand tokenized stock trading by 2028

Pham expects tokenized shares of publicly listed companies to become more widely available through major U.S. financial markets over the next two years. She predicted that the New York Stock Exchange and Nasdaq could support “real” tokenized stocks with meaningful trading activity by approximately 2028. The prediction concerns a potential future development, not a confirmed launch schedule or trading volume commitment from either exchange.

Her assessment focuses on securities that preserve the rights associated with traditional stock ownership. According to Pham, genuine tokenized shares should give investors the appropriate shareholder rights, including voting privileges and participation in corporate governance. She distinguished such products from synthetic tokens that track a company’s share price without necessarily providing ownership of the underlying securities.

The SEC has already introduced a limited framework for trading tokenized U.S. stocks. On September 17, the commission approved temporary, conditional exemptions allowing eligible tokenized securities venues to operate through permissioned automated market makers and liquidity pools. The framework requires equivalent shareholder rights, trading restrictions and protections against conflicts with existing stock market rules.

Pham pointed to partnerships between established exchanges and cryptocurrency companies as examples of the direction she expects the market to take. In September, Nasdaq announced an agreement to invest $100 million in Kraken parent Payward as the companies expanded their work on tokenized stock infrastructure. As crypto.news reported, Nasdaq and Payward expect their Nasdaq Equity Tokens initiative to become available in the second quarter of 2027, subject to the project’s development and applicable regulatory requirements.

Another proposed platform involves Intercontinental Exchange, the parent company of the NYSE, and cryptocurrency exchange OKX. Their OKXICE venture has sought SEC approval to offer tokenized shares of 63 NYSE-listed companies. The October 5 filing coverage described a proposed trading venue that would preserve shareholder rights and give companies an opportunity to object before their securities are made available through unaffiliated tokenization arrangements. Commercial operation remains subject to the relevant regulatory conditions.

Pham expressed optimism about another possible development involving non-fungible tokens. She suggested that improved regulatory certainty could encourage companies to use NFTs for customer rewards, memberships and loyalty programs, comparing those applications with airline miles and retail rewards. Her prediction concerns potential commercial uses of NFTs and does not represent an announced CFTC policy or a confirmed timeline for new products.

The SEC’s current tokenized stock exemption remains subject to its published operating conditions, including restrictions on eligible securities and transaction volumes. The commission has requested public feedback on the temporary framework and potential future changes. Separately, its proposed Regulation Crypto Assets rule has a public comment deadline of October 20, 2026, according to the agency’s rulemaking record