The US Commodity Futures Trading Commission (CFTC) is exploring the use of tokenized assets, including stablecoins, as collateral in derivatives markets, a move that has the backing of crypto industry leaders.
CFTC acting chair Caroline Pham stated on Tuesday that her agency aims to “collaborate closely with stakeholders” regarding this initiative and is inviting feedback on the use of tokenized collateral in derivatives markets until October 20.
“The public has spoken: tokenized markets are here, and they are the future. I have long asserted that collateral management is the ‘killer app’ for stablecoins in market settings.”
If carried out, stablecoins such as USDC (USDC) and Tether (USDT) would function similarly to traditional forms of collateral like cash or US Treasurys in regulated derivatives trading. Earlier this year, Congress enacted laws regulating stablecoins, which have increasingly been adopted by financial institutions.
Support from Stablecoin and Crypto Leaders
Circle president Heath Tarbert expressed that the GENIUS Act “establishes a framework where payment stablecoins issued by licensed American firms can be used as collateral in derivatives and other traditional financial markets.”
“Utilizing trusted stablecoins like USDC as collateral will reduce costs, diminish risks, and unlock liquidity in global markets around the clock,” Tarbert noted.
US President Donald Trump signed the GENIUS Act into law in July, aiming to provide clarity on payment stablecoins but still pending final regulations before it can be enacted.
Coinbase chief legal officer Paul Grewal also supported this initiative, stating in a post on X that “tokenized collateral and stablecoins can unlock US derivatives markets and place us ahead of global competition.”
Meanwhile, Jack McDonald, senior vice president of stablecoins at Ripple, emphasized that the CFTC’s proposal is a crucial step towards weaving stablecoins into the “core of regulated financial markets,” enhancing efficiency and transparency in derivatives trading.
“Setting clear guidelines for valuation, custody, and settlement will provide institutions the certainty they require, while safeguards on reserves and governance will foster trust and resilience.”
Ongoing Efforts Since Early 2025
Pham mentioned that the tokenized asset initiative will evolve from the CFTC’s Crypto CEO Forum and is also part of a previously announced crypto sprint aimed at applying the President’s Working Group on Digital Asset Markets recommendations.
The crypto CEO forum held in February called on crypto industry leaders to provide feedback for an upcoming digital asset pilot program and explored the use of tokenized non-cash collateral.
Related: CFTC adds crypto leaders to digital asset group, JPMorgan exec tapped for co-chair
The CFTC’s Global Markets Advisory Committee also released a recommendation last year from its Digital Asset Markets Subcommittee aimed at broadening the utilization of non-cash collateral via distributed ledger technology.
Shifts in US Crypto Regulation
Pham’s announcement coincides with the same day that Securities and Exchange Commission Chair Paul Atkins revealed that his agency is developing an innovation exemption that would provide temporary relief from outdated securities regulations for crypto companies as the SEC devises tailored regulations.
He also introduced Project Crypto in July, aimed at modernizing the securities rules surrounding crypto and transitioning America’s financial markets on-chain.
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