CFTC Approves Bitcoin and Ethereum as Collateral in US Derivatives Markets

TLDR

• The CFTC launched a pilot program allowing Bitcoin, Ether, and USDC to be used as collateral in US derivatives markets.
• The program applies to approved futures commission merchants with strict custody and weekly reporting requirements.
• Acting Chairman Caroline Pham announced updated guidance for tokenized assets including US Treasuries and money market funds.
• The CFTC withdrew 2020 guidance that previously blocked crypto as collateral, citing the GENIUS Act.
• Industry executives including Coinbase’s chief legal officer praised the move as a major step for crypto adoption.

The US Commodity Futures Trading Commission has launched a pilot program allowing cryptocurrency to be used as collateral in derivatives markets. The program marks the first time digital assets can officially serve this role in regulated US trading.

Acting Chairman Caroline Pham announced the initiative on Monday. The pilot permits futures commission merchants to accept Bitcoin, Ether, and USDC stablecoin as margin collateral. These firms facilitate futures trades for clients and must now follow strict reporting rules.

Collateral in derivatives markets works as a security deposit. It guarantees that traders can cover potential losses. The CFTC program creates formal guidelines for how crypto assets can fill this function.

Participating companies must meet specific criteria to join the pilot. They need to provide weekly reports on total customer holdings. They must also alert the CFTC immediately about any issues affecting the crypto collateral.

The program runs with enhanced CFTC monitoring for the first three months. Firms must comply with custody requirements designed to protect customer assets. The reporting system tracks operational risks in real time.

New Guidance for Tokenized Assets

The CFTC also issued updated guidance covering tokenized real-world assets. This includes tokenized US Treasuries and money market funds. The guidance addresses legal enforceability, asset segregation, and control arrangements.

Pham stated the guidance provides regulatory clarity for adding more digital assets as collateral. Exchanges and brokers can now accept these assets alongside traditional securities. The rules remain technology-neutral while setting standards for valuation and custody.

The agency withdrew previous guidance from 2020 known as Staff Advisory 20-34. This old advisory had restricted futures commission merchants from accepting crypto as customer collateral. Officials said it became outdated after passage of the GENIUS Act.

The CFTC issued a no-action letter for payment stablecoins. This gives firms limited permission to hold certain digital assets in segregated customer accounts. Companies must manage risks according to specific guidelines.

Industry Response

Coinbase Chief Legal Officer Paul Grewal called the withdrawn 2020 advisory a “concrete ceiling on innovation.” He said it relied on outdated information and went beyond regulatory bounds. The new program aligns with goals from the President’s Working Group.

Katherine Kirkpatrick Bos from StarkWare described tokenized collateral in derivatives markets as transformative. She cited benefits including atomic settlement, transparency, automation, and capital efficiency. The move follows a tokenization summit held earlier in 2024.

Salman Banaei from Plume Network called it a push toward wider adoption. He noted the program could automate settlement for over-the-counter derivatives and swaps. These represent one of the largest asset classes globally.

Circle CEO Heath Tarbert said the pilot will protect customers and reduce settlement frictions. He emphasized it helps with risk reduction in derivatives trading. Circle issues USDC, one of the approved stablecoins in the program.

The pilot program launched December 8, 2025, with the first three-month monitoring period starting immediately for participating futures commission merchants.

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