Crypto analyst Mr. Legend said if the Commodity Futures Trading Commission (CFTC) were to approve using digital assets as trading collateral, it would be a "boon for the digital assets market.'
"CFTC reportedly mulling accepting digital assets as trading collateral," the analyst wrote in an October 4 post on X. "The proposal faces multiple steps before approval, but its passage could ultimately be a boon for the digital assets market."
On October 2nd, 2024, a CFTC subcommittee reportedly voted to approve guidelines that would allow financial firms to use distributed ledger technology (DLT) for holding and transferring non-cash collateral. These recommendations now move to the full committee for consideration later this year.
According to a Bloomberg report, the CFTC Global Markets Advisory Committee’s subcommittee voted to pass its recommendations that would allow firms to use tokenized shares as collateral on the to full committee for approval later this year.
The subcommittee, which includes major players like Citadel, BlackRock, and Bank of New York Mellon, passed the recommendations to the full committee, according to sources familiar with the matter.
If approved, these guidelines would apply existing margin and collateral requirements to blockchain technology, enabling its use in line with U.S. regulatory policies and derivatives clearing organizations.
A 2024 McKinsey report estimates the tokenized market, excluding stablecoins, could reach $2 trillion by 2030, driven by its use in mutual funds, bonds, loans, and alternative assets, potentially matching the current size of the cryptocurrency market.
Crypto prime brokers Hidden Road and FalconX have already begun accepting BlackRock’s BUIDL token as collateral, marking early adoption of this new financial model.
The Global Markets Advisory Committee (GMAC), established in 1998, advises the CFTC on issues impacting the integrity and competitiveness of U.S. markets and firms in the global marketplace, with a focus on regulatory challenges and international standards for futures, swaps, options, and derivatives markets.
