The Commodity Futures Trading Commission (CFTC) has launched a digital assets pilot program that will allow certain digital assets, including bitcoin (BTC), ether (ETH), and USD Coin (USDC), to be used as collateral in derivatives markets. Acting Chairman Caroline D. Pham announced the initiative, which also includes new guidance on tokenized collateral and the withdrawal of outdated requirements following the enactment of the GENIUS Act.
Acting Chairman Pham stated, “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.” She added, “Today, I am launching a U.S. digital assets pilot program for tokenized collateral, including bitcoin and ether, in our derivatives markets that establishes clear guardrails to protect customer assets and provides enhanced CFTC monitoring and reporting. The CFTC is also providing regulatory clarity through tokenized collateral guidance for real world assets like U.S. Treasuries, and withdrawing CFTC requirements that are now outdated under the GENIUS Act. 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.”
Industry leaders responded positively to these changes.
Paul Grewal, Chief Legal Officer at Coinbase said: “The CFTC's decision confirms what the crypto industry has long known: That stablecoins and digital assets can make payments faster, cheaper, and reduce risk,” adding praise for Acting Chair Pham’s leadership: “We applaud Acting Chair Caroline Pham and the CFTC for swiftly recognizing that tokenized innovation is the future of finance, and thank Acting Chair Caroline Pham for her leadership and vision. 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."
Heath Tarbert, President of Circle commented: "Circle applauds Acting Chairman Pham's breakthrough leadership for derivatives markets and responsible innovation," noting benefits such as customer protection and reduced settlement frictions: "Deploying prudentially supervised payment stablecoins across CFTC-regulated markets protects customers, reduces settlement frictions, supports 24/7 risk reduction, and advances U.S. dollar leadership through global regulatory interoperability. Enabling near-real-time margin settlement will also mitigate settlement-failure and liquidity-squeeze risks across evenings, weekends, and holidays. Acting Chairman Pham and the Commission have set a course for the future in which the United States will continue to have the safest, deepest, and most trusted global derivatives markets."
Kris Marszalek from Crypto.com highlighted regulatory certainty: “Today marks an important milestone in the history of the crypto industry—we have been given regulatory certainty for the future,” he said. He continued: “The CFTC guidance on tokenized collateral is the latest example of Acting Chairman Pham delivering on the promise of President Trump to make the United States the ‘crypto capital of the world.’ Acting Chairman Pham should be commended for these leadership efforts... It has only been because of...the CFTC's exclusive jurisdiction over our CFTC-regulated clearinghouse that we will now be able to use tokenized collateral...This means 24/7 trading is a reality in the United States.”
Jack McDonald from Ripple added: "The CFTC's actions mark a pivotal moment for integrating digital assets into regulated derivatives markets...By recognizing tokenized digital assets—including stablecoins—as eligible margin...This step will unlock greater capital efficiency..."
According to details provided by several divisions within CFTC—the Market Participants Division (MPD), Division of Market Oversight (DMO), and Division of Clearing & Risk—new guidance clarifies how firms may use tokenized real-world assets such as U.S Treasury securities or money market funds as collateral when trading futures or swaps.
Key points include technology-neutral regulations; analysis based on each asset; rules regarding legal enforceability; segregation; custody; valuation; haircuts; operational risks; as well as robust risk management practices required from Futures Commission Merchants (FCMs). For an initial three-month period after joining this pilot program under a no-action position issued by MPD—which temporarily relieves FCMs from some requirements—only BTC, ETH or USDC may be accepted as margin collateral.
Participating FCMs must provide weekly reports detailing amounts held per asset type/class in customer accounts while promptly notifying staff about significant issues with using such collateral.
Additionally effective immediately MPD withdrew Staff Advisory No 20-34 which had previously restricted acceptance by FCMs but was deemed outdated due both legislative changes via GENIUS Act & industry developments since its issuance.
These measures were shaped by stakeholder input including public comments & recommendations from forums like Digital Asset Markets Subcommittee under Global Markets Advisory Committee sponsored by Acting Chairman Pham.
