TLDR
- The CFTC has approved the use of tokenized assets like Bitcoin, Ethereum, and USDC as collateral in U.S. derivatives markets.
- A new pilot program has been launched by the CFTC to integrate digital assets into traditional financial systems while maintaining market protections.
- The CFTC’s updated rules allow tokenized Treasuries and other real-world assets to be used as collateral, provided they meet specific standards.
- The CFTC has removed Staff Advisory 20-34, which previously limited how firms could hold or manage digital assets as collateral.
- The CFTC’s decision follows the passing of the GENIUS Act and the rapid advancement of tokenization technology in the financial market.
The U.S. Commodity Futures Trading Commission (CFTC) has approved the use of tokenized assets as collateral in U.S. derivatives markets. The decision marks a significant shift towards integrating cryptocurrency assets into traditional financial systems. This approval includes assets such as Bitcoin, Ethereum, and USDC, offering a clearer regulatory path for digital assets.
CFTC Launches Pilot Program for Tokenized Collateral
On Monday, Acting CFTC Chair Caroline D. Pham unveiled a new pilot program for tokenized collateral. This initiative will allow specific digital assets to be used in derivatives markets, while ensuring market protections remain intact. The CFTC will closely monitor the program, which includes reporting requirements for participating companies.
“The CFTC is committed to fostering innovation while safeguarding market integrity,” Pham said in a press release. The pilot program will provide clear guidelines for the custody and valuation of tokenized assets. These new rules offer a framework for both financial institutions and digital asset companies to work within the CFTC’s regulatory scope.
Tokenized Treasuries and Real-World Assets Allowed
The CFTC’s updated guidance specifies that tokenized Treasuries and other real-world assets may also be used as collateral. These assets must meet strict custody and valuation standards to comply with the program’s rules. This move provides broader flexibility for financial institutions to leverage tokenized assets in the derivatives market.
Pham emphasized that this change does not favor specific technologies. The CFTC aims to establish a level playing field, where tokenized Treasuries are treated similarly to digital assets like Bitcoin and Ether. The new framework supports financial innovation while maintaining protections for market participants.
CFTC Ends Restrictions on Digital Asset Collateral
As part of the policy changes, the CFTC has also removed Staff Advisory 20-34. This advisory previously limited how firms could hold or manage digital assets as collateral. The decision follows the rapid advancement of tokenization technology and the passing of the GENIUS Act.
The removal of the advisory allows firms to use tokenized assets that were once restricted. This move opens new avenues for institutions to explore blockchain technology in the derivatives market. The CFTC’s decision signals its growing openness to digital assets and their integration into mainstream financial products.
In a separate development, the CFTC recently approved the first-ever spot crypto products for trading on registered exchanges. This decision is seen as a step toward making the U.S. a global hub for cryptocurrency trading. The CFTC continues to lead in integrating digital assets into regulated financial markets, while ensuring market integrity.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
