The U.S. pilot program allows bitcoin, ether, and USDC to be used as collateral in derivatives markets.
The U.S. Commodity Futures Trading Commission has published new guidance on the use of tokenized assets as collateral in derivatives markets, paving the way for a pilot program that will allow cryptocurrencies to be used in the sector.
The experimental program, announced on December 8 by CFTC Acting Chair Caroline Pham, will allow futures commission merchants (FCMs)—firms that facilitate futures contract transactions on behalf of clients—to accept bitcoin, ether, and the stablecoin USDC as margin collateral.
Collateral in derivatives markets functions as a security deposit: it represents a guarantee that ensures a trader’s ability to cover potential losses.
Benefits for the market
The CFTC’s initiative represents a further step toward integrating digital assets into regulated markets. Heath Tarbert, CEO of Circle, highlighted that the program will not only protect clients but also reduce inefficiencies in transaction settlement processes and help mitigate risks.
Caroline Pham emphasized that the pilot program “establishes clear protective guardrails to safeguard customer assets and provides for enhanced monitoring and reporting by the CFTC.”
Participants in the program will be subject to strict reporting requirements. FCMs will be required to submit weekly reports documenting total customer positions and any issues that could affect the use of digital assets as collateral.
The CFTC has also issued new guidance explaining how tokenized real-world assets, such as Treasury securities and money-market funds, can be used within the agency’s existing regulatory framework.
To clear the way for the new regime, the Market Participants Division withdrew Staff Advisory 20-34, a 2020 memorandum that restricted FCMs from accepting digital assets as customer collateral. The agency stated that the advisory had become outdated in light of advances in tokenization and the regulatory changes introduced by the GENIUS Act.
