On Monday, the Commodity Futures Trading Commission (CFTC) initiated a pilot program permitting specific digital assets — bitcoin , ether and USD Coin (USDC) or other payment stablecoins — to serve as collateral in U.S. derivatives markets.
The announcement, made by Acting Chairman Caroline Pham, aims to provide market participants with explicit regulations regarding the use of tokenized collateral, including digital representations of real-world assets like U.S. Treasuries.
“Today, I am launching a U.S. digital assets pilot program for tokenized collateral, which includes bitcoin and ether, in our derivatives markets that establishes clear boundaries to safeguard customer assets and enhances CFTC monitoring and reporting,” Pham declared in a statement.
Earlier this year, the CFTC had already started exploring the utilization of stablecoins as collateral for specific products.
Currently, the program is applicable only to futures commission merchants (FCMs) that satisfy certain requirements. These firms can accept BTC, ETH, and payment stablecoins such as USDC as margin collateral for futures and swaps but must adhere to stringent reporting and custody protocols. For the first three months, they are required to submit weekly disclosures regarding their digital asset holdings and notify the CFTC of any issues.
In practice, this could imply a registered entity accepting bitcoin as collateral for a leveraged swap associated with commodities, while the CFTC oversees the operational risks and custody provisions.
The agency also released a no-action letter granting FCMs limited authority to maintain specific digital assets in segregated customer accounts, as long as they manage risks meticulously. Notably, the CFTC has retracted earlier guidance from 2020 that had effectively restricted the use of cryptocurrency as collateral in many instances. This advisory is now considered outdated, especially following the introduction of the GENIUS Act, which revised federal regulations related to digital assets.
Industry leaders lauded the initiative. “This pivotal action is exactly what the Administration and Congress envisioned the GENIUS Act to accomplish,” remarked Coinbase Chief Legal Officer Paul Grewal in a statement distributed by the CFTC.
The CFTC insisted that its regulations remain neutral regarding technology but stated that real-world tokenized assets like Treasuries still need to comply with enforceability, custody, and valuation criteria.
