CFTC Approves Tokenized Assets as Collateral For Derivatives

The U.S. Commodity Futures Trading Commission (CFTC) has officially announced that tokenized assets can now be used as collateral in derivatives markets. 

This is a big step in linking crypto with traditional finance. It also shows the commission is becoming more open to digital assets while still protecting investors.

CFTC Launches Pilot for Digital Asset Collateral

The commission announced a new pilot program that allows certain digital assets to be used as collateral in U.S. derivatives markets. The assets included in this first phase are Bitcoin (BTC), Ethereum (ETH), and the USDC stablecoin.

Acting Chair Caroline D. Pham said this is the agency’s first formal effort to support crypto innovation while still protecting customer funds. The program creates clear rules for how tokenized collateral should be handled, how it must be monitored, and how reporting will work.

Under the pilot, participating companies must closely track all activities linked to digital asset collateral. They must send weekly reports showing customer asset holdings and any problems in operations. 

CFTC Clarifies Its Rules on Digital Asset Collateral

The guidance makes clear that the agency’s rules do not favor one technology over another. Tokenized U.S. Treasuries and other real-world assets can also be used as collateral. 

They must meet the agency’s standards for custody, valuation, and risk management. Pham emphasized that the framework aims to support new ideas. She added that it will not weaken the protections that have shaped U.S. derivatives markets for decades. 

By setting firm requirements, the commission is aiming to give companies room to innovate safely. This decision builds on a policy change made in September. At that time, the agency allowed stablecoins and certain digital assets to be used as collateral in derivatives markets. 

That update was supported by recommendations from the President’s Working Group on Digital Asset Markets.

CFTC Updates Rules to Support Tokenized Assets

Industry leaders have responded positively to this latest  development. Coinbase’s chief legal officer (CLO) noted that the move acknowledges how blockchain assets can improve financial systems. He said they can lower costs, speed up payments, and reduce risk.

The commission has also removed an older rule known as Staff Advisory 20-34. That rule limited how firms could hold or manage digital assets as collateral.  Its removal reflects recent advances in tokenization technology and the passage of the GENIUS Act, both of which have pushed the financial sector to modernize.

As a result, many institutions can now use tokenized assets that were once restricted. This opens the door to a regulated and efficient way of bringing blockchain technology into the derivatives market.

The decision comes shortly after the agency approved the first spot crypto products on registered exchanges. According to Pham, these combined actions bring the United States closer to becoming a global center for digital asset activity.