CFTC Launches Digital Assets Pilot Program for Tokenized Collateral

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Acting Commodity Futures Trading Commission (CFTC) Chair Caroline Pham has unveiled a new digital assets pilot program that will allow select cryptocurrencies, including Bitcoin, Ethereum, and USDC, to be used as collateral in derivatives markets. The initiative also includes updated guidance on tokenized collateral and the removal of outdated rules following the passage of the GENIUS Act.

Key Points

The CFTC launches a pilot program allowing Bitcoin, Ethereum, and USDC as collateral in derivatives markets.
Updated guidance reinforces technology-neutral regulations and provides clarity for FCMs using tokenized assets.
The initiative encourages responsible innovation and institutional adoption while promoting risk management.

According to the agency’s press release, the initiative represents a major step toward integrating digital assets into regulated markets under strengthened safeguards. The move builds on the tokenized collateral effort Pham introduced in September as part of the CFTC’s Crypto Sprint, which aims to advance recommendations outlined in the President’s Working Group report on digital asset markets.

“Under my leadership this year, the CFTC has led the way forward into America’s Golden Age of Innovation and Crypto. This imperative has never been more important given recent customer losses on non-U.S. crypto exchanges. Americans deserve safe U.S. markets as an alternative to offshore platforms, and that’s why last week I announced that spot crypto can now be traded on CFTC registered exchanges,” Acting Chairman Pham stated. “As I’ve said before, embracing responsible innovation ensures that U.S. markets are the world leader, and drives progress that will unleash U.S. economic growth because market participants can safely put their dollars to work smarter and go further,” Pham added.

Several crypto industry firms publicly welcomed Pham’s announcement, describing the initiative as a meaningful step toward clearer rules and greater institutional participation. Coinbase Chief Legal Officer Paul Grewal praised Pham’s initiative, saying the CFTC’s decision reinforces a long-held view within the industry that stablecoins and other digital assets can deliver faster, lower-cost payments while reducing operational risk.

“This major unlock is precisely what the Administration and Congress intended the GENIUS Act to enable — and will allow digital innovation to transform and improve traditional areas of finance. We encourage other regulators to quickly follow suit,” Grewal stated.

The CFTC’s Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk issued updated guidance outlining how tokenized assets can be used as collateral in futures and swaps trading. The agency reaffirmed that its rules are technology-neutral and urged firms to evaluate tokenized assets individually under existing regulations and internal policies. The guidance covers tokenized reаl-world assets such as U.S. Treasuries and money market funds, addressing issues including eligibility, legal enforceability, custody arrangements, valuation practices, and operational risk.

The Market Participants Division also rеleased a no-action position for Futures Commission Merchants (FCMs) that accept certain non-securities digital assets, including payment stablecoins, as customer margin or hold them in segregated accounts. The move provides greater regulatory clarity around segregation and capital requirements while emphasizing the need for strong risk-management controls.

By establishing parameters for FCMs to recognize non-securities digital assets as margin collateral and deposit stablecoins as residual interest, the no-action letter creates a pilot framework that promotes responsible innovation and allows CFTC staff to closely observe how these practices evolve in the marketplace.

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Frequently Asked Questions

The pilot program allows select cryptocurrencies, including Bitcoin, Ethereum, and USDC, to be used as collateral in derivatives markets, with updated guidance and relaxed outdated rules.

Eligible tokenized assets include cryptocurrencies like Bitcoin, Ethereum, USDC, and tokenized real-world assets such as U.S. Treasuries and money market funds.

FCMs can accept certain non-securities digital assets as customer margin or hold them in segregated accounts without fear of regulatory penalties, provided strong risk-management practices are maintained.

MICHAELA

Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is the official publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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