In a landmark move, the CFTC launches a pilot program allowing tokenized digital assets to be used as margin collateral in regulated U.S. derivatives markets, beginning with Bitcoin, Ethereum, and Circle’s USDC for the first three months.

Updated CFTC guidance clarifies that tokenized assets can serve as collateral under a technology-neutral framework, with the pilot run through participating futures commission merchants (FCMs).

The digital-assets pilot aims to raise guardrails for customer asset protections and enhance the agency’s monitoring and reporting as digital collateral expands in futures and swaps.

The piece includes a brief AI disclosure and notes regulatory discussions and industry reactions surrounding the development.

Industry reaction is largely favorable, with Coinbase signaling that the shift could unlock innovation by reducing friction in collateral use.

The rollout will be gradual, as market participants build custody infrastructure, establish 24/7 valuation processes, and train staff for the expanded framework.

Crypto executives applaud the move for potential gains in settlement efficiency, transparency, and capital efficiency, suggesting wider adoption of digital-asset collateral in regulated markets.

The CFTC withdrew Staff Advisory No. 20-34 and issued no-action relief, aligning with GENIUS Act developments to allow limited custody and revised rules for digital assets in segregated accounts and for specific stablecoins.

A no-action position clarifies custody and capital rules for non-securities digital assets, including stablecoins, under the new regime while phasing out older restrictive guidance.

The no-action stance and guidance emphasize the technology-neutral treatment of tokenized assets and their applicability to tokenized real-world assets like Treasuries and money-market funds.

This announcement follows other CFTC steps, including permission for federally regulated spot crypto trading and plans for regulated spot products on venues under CFTC oversight.

Acting Chair Caroline Pham emphasizes the pilot’s purpose as establishing guardrails to protect customer assets and improve monitoring and reporting, signaling regulatory clarity for broader collateral use.

The program is designed to expand the use of digital assets in U.S. markets by strengthening oversight and protections while enabling more widespread collateral in futures and swaps.

No-action relief for FCMs accepting non-securities digital assets as margin, including stablecoins, clarifies capital and segregation requirements under the new framework.

The pilot sits within a broader regulatory push to include stablecoins and other tokenized assets in traditional financial markets.

New guidance confirms tokenized real-world assets like Treasuries and money-market funds can be used under technology-neutral rules, with ongoing focus on custody, valuation, and operational risk.

The initiative marks a major policy shift toward broader adoption of tokenized assets in regulated derivatives markets.

During the initial three months, FCMs will report weekly on digital asset holdings used as customer margin and promptly notify regulators of material incidents, ensuring ongoing oversight.

This pilot follows the CFTC’s move to permit spot crypto trading on CFTC-regulated venues, described as a historic shift by Acting Chairman Pham.

The GENIUS Act previously expanded the CFTC’s authority over non-securities digital assets and provided a federal framework relevant to tokenized collateral.

Regulated derivatives venue Bitnomial and others are preparing for leveraged spot trading to precede or accompany the pilot, expanding the ecosystem.

Acting Chair Pham announced the program and new guidance, including the withdrawal of Staff Advisory 20-34 restricting virtual currency in segregated accounts.

Industry leaders, including Coinbase, Circle, and Crypto.com, welcomed the move, highlighting 24/7 U.S. trading potential and broader use of stablecoins as settlement instruments under GENIUS Act guidance.