The U.S. Commodity Futures Trading Commission (CFTC) has launched a pilot program permitting Bitcoin, Ether, and USDC to be used as collateral in derivatives markets. Announced in Washington by Acting Chair Caroline Pham, the initiative marks a step toward clearer, practical rules for tokenized assets under the GENIUS Act, following years of industry requests. The program overturns previous limitations, including the withdrawal of Staff Advisory 20-34 from 2020, which had largely prevented digital assets from backing derivatives positions. Alongside the pilot, the CFTC issued updated guidance on tokenized real-world assets, such as U.S. Treasuries and money market funds, emphasizing a technology-neutral approach. https://twitter.com/CFTC/status/1998141468993556785 A new rulebook for tokenized collateral Caroline Pham, the Acting Chair of the U.S. CFTC, stated that the pilot establishes guardrails to protect customer assets and gives the agency stronger visibility through active reporting. Only approved futures commission merchants (FCMs) are eligible to participate in the first phase. FCMs can now accept BTC, ETH, and stablecoins as margin if they meet custody and risk standards, submit weekly holdings reports, and notify the CFTC of any issues. The CFTC also issued a no-action letter giving participating firms limited permission to hold certain digital assets in segregated customer accounts. This clarifies capital treatment and segregation rules while allowing firms to test the framework without full enforcement pressure. In practice, registered firms can post Bitcoin as collateral for leveraged swaps tied to commodities while the CFTC monitors custody, valuation, and operational safeguards. Tokenized Treasuries and money market funds must still meet existing standards for enforceability, valuation, and custody. The goal, according to Pham, is to bring these assets into a supervised environment and offer traders a safer alternative to offshore venues. Key requirements for the pilot: Weekly reporting of digital asset holdings by account type Immediate notification of any material issue related to margin assets Acceptance limited to Bitcoin, Ether, and USDC during the initial three months Custody and segregation rules applied to tokenized assets Technology-neutral evaluation of all collateral structures Why it matters: crypto moves from fringe to financial plumbing BTC, ETH, and USDC can now serve as official collateral in U.S.-regulated derivatives. Institutions get a regulated on-ramp, reducing liquidity friction and boosting capital efficiency. Clear custody, segregation, and risk rules lower legal uncertainty for crypto-backed products. The U.S. strengthens its position as a global hub for regulated crypto derivatives. Compliance burdens rise, yet institutions gain safer, supervised access. Industry leaders call it a milestone for U.S. market structure The response from major crypto firms has been strongly positive. Coinbase Chief Legal Officer Paul Grewal stated that the decision acknowledges that tokenization can reduce settlement costs and enhance market safety, providing a regulatory framework aligned with the GENIUS Act. Circle President Heath Tarbert said that supervised stablecoins will improve round-the-clock settlement, thereby boosting confidence among firms that rely on fast transfers. Crypto.com CEO Kris Marszalek described the pilot as an important moment for domestic markets, noting that structures once only possible overseas can now operate under U.S. oversight. Ripple’s Jack McDonald added that allowing tokenized assets to serve as margin will improve capital efficiency and strengthen the U.S. position in financial innovation. With digital assets now usable as collateral in regulated derivatives markets, the pilot marks a clear step toward wider institutional adoption and deeper integration of crypto into mainstream U.S. finance.
CFTC Launches Digital Assets Pilot Allowing Bitcoin, Ether and USDC as Collateral
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