CFTC to Pilot Tokenized Collateral in Derivatives Markets Starting With Bitcoin, Ethereum and USDC

The Commodity Futures Trading Commission has introduced a pilot program that will allow tokenized digital assets to be used as margin collateral in U.S. derivatives markets, marking one of the most significant regulatory shifts for crypto since the passage of the GENIUS Act earlier this year.

The initiative aims to bring digital-asset activity into supervised U.S. markets and reduce reliance on offshore trading venues, Acting Chairman Caroline Pham said in a statement Monday.

During the first three months, eligible collateral will be limited to Bitcoin, Ethereum, and USDC.

The program establishes guardrails for Futures Commission Merchants that choose to accept digital assets as customer collateral, including weekly reporting requirements and prompt notification of any operational issues. 

The CFTC also issued new guidance outlining how tokenized real-world assets, such as Treasury securities and money-market funds, can be used within the agency’s existing regulatory framework. 

The guidance addresses segregation, custody arrangements, valuation standards, and operational risks, and reiterates that the rules remain technology-neutral.

To clear the way for the new regime, the Market Participants Division withdrew Staff Advisory 20-34, a 2020 memo that restricted FCMs from accepting digital assets as customer collateral. 

The agency said the advisory had become outdated following advances in tokenization and the legal changes introduced by the GENIUS Act.

The GENIUS Act, which was passed in July, created a federal framework for non-securities digital assets and expanded the CFTC’s authority over spot crypto markets and tokenized collateral.

Echoing the CFTC’s sentiment, Coinbase’s Chief Legal Officer, Paul Grewal, tweeted on Monday that the 2020 advisory was a “concrete ceiling on innovation.”

“It relied on outdated info, went well beyond the bounds of regulation, and frustrated the goals of the President’s Working Group on Digital Asset Markets,” he said.

The pilot arrives days after the CFTC moved to permit spot crypto trading on CFTC-registered exchanges for the first time, a shift Acting Chairman Pham described as unprecedented. 

Bitnomial, a Chicago-based platform that has long been regulated as a derivatives venue, is slated to debut leveraged spot trading this week alongside its existing futures and options products.