CFTC Opens Door for Stablecoins as Derivatives Collateral

The U.S. Commodity Futures Trading Commission (CFTC) is exploring a proposal that would allow tokenized assets—including popular stablecoins—to be used as collateral in regulated derivatives markets. Acting Chair Caroline Pham announced the initiative on Tuesday, inviting public feedback until October 20.

“The public has spoken: tokenized markets are here, and they are the future,” Pham said. She described collateral management as the “killer app” for stablecoins, underscoring the agency’s interest in bringing digital assets into mainstream financial infrastructure.

Stablecoins Gain Ground in Traditional Finance

If approved, the plan would let stablecoins such as USD Coin (USDC) and Tether operate alongside traditional collateral like cash or U.S. Treasury securities in derivatives trading. Earlier this year, Congress passed the GENIUS Act, a law aimed at establishing clear rules for payment stablecoins. Though final regulations are pending, the legislation has already signaled Washington’s willingness to integrate digital currencies into conventional markets.

Industry leaders quickly endorsed the CFTC’s proposal. Executives from Circle Internet Group, Tether, Ripple Labs, Coinbase, and Crypto.com all voiced support. Heath Tarbert, president of Circle, called the initiative a breakthrough, noting that the GENIUS Act “creates a world where payment stablecoins issued by licensed American companies can be used as collateral in derivatives and other traditional financial markets.” 

Using trusted stablecoins like USDC, he added, could lower costs, reduce risk, and provide round-the-clock liquidity worldwide.

Paul Grewal, chief legal officer at Coinbase, echoed that sentiment on social platform X, writing that “tokenized collateral and stablecoins can unlock U.S. derivatives markets and put us ahead of global competition.”

Building on Existing Crypto Efforts

The CFTC’s move builds on its earlier outreach to the digital asset sector. The agency launched a Crypto CEO Forum in February to gather input on a pilot program for tokenized non-cash collateral. Its Global Markets Advisory Committee has also recommended expanding the use of distributed ledger technology to support non-cash collateral in derivatives trading.

Pham emphasized that the tokenized asset initiative aligns with the CFTC’s ongoing “crypto sprint,” designed to implement recommendations from the President’s Working Group on Digital Asset Markets.

The announcement coincided with fresh signals of regulatory change from the Securities and Exchange Commission. SEC Chair Paul Atkins said his agency is developing an “innovation exemption,” which would temporarily ease older securities rules while new, crypto-focused regulations take shape. 

He highlighted Project Crypto, a plan introduced in July to modernize securities oversight and move more of America’s financial infrastructure onchain.