CFTC lets crypto collateral take center stage in US derivatives market
The Commodity Futures Trading Commission (CFTC) has launched a pilot program allowing Bitcoin, Ether, and USDC to be used as collateral in U.S. derivatives markets.
Summary
- The CFTC has launched a pilot program allowing Bitcoin, Ether, and USDC to be used as in-kind collateral in U.S. derivatives markets through registered brokers.
- The program includes enhanced reporting and monitoring to ensure safety and regulatory compliance.
- It also provides broader guidance for tokenized real-world assets, aiming to integrate cryptocurrencies into traditional finance.
The update marks a significant step toward integrating digital assets into traditional finance.
Speaking on CNBC’s Squawk Box on Wednesday, CFTC Acting Chairman Caroline Pham emphasized that the program is designed to be both controlled and safe.
Under the pilot, CFTC-registered brokers, known as futures commission merchants, can accept in-kind crypto collateral for contracts denominated in the same asset. For example, Bitcoin can be used to collateralize Bitcoin contracts.
“What we’ve done is structure this pilot program so that if you are using a CFTC-registered broker, or futures commission merchant, which are overseen by us and the National Futures Association, you can use Bitcoin, Ether, and USDC to collateralize contracts denominated in those same assets.”
The program includes enhanced monitoring, requiring weekly reporting on positions, asset classes, and operational issues, providing regulators with close oversight while allowing the market to experiment.
Pham, who President Trump tapped to serve as the CFTC’s acting chair in January, noted that this initiative is part of a broader effort to bring tokenized real-world assets—including U.S. Treasuries, stablecoins, and money market funds—into a regulated framework.
Recommendations from the CFTC’s Global Markets Advisory Committee, which includes major banks and asset managers, guided the program’s design, emphasizing technology-neutral rules, minimum liquidity standards, and enforceable compliance measures.
The move also addresses concerns about excessive leverage in unregulated offshore crypto markets.
“On non-U.S. or offshore exchanges, there are no leverage limits, and excessive leverage combined with auto-liquidation can create dramatic, uncontrolled waves of customer losses,” Pham said. “This is why it’s important to bring crypto within the regulatory perimeter. Our futures exchanges have been the gold standard for market integrity.”
While still limited in scope, the program is a forward-looking experiment, giving regulators and firms insight into how cryptocurrencies can function as collateral in a safe, transparent environment.
For the full interview, see below. For more coverage on the CFTC and Pham, click here.
