Commodity Futures Trading Commission (CFTC) acting chair Caroline Pham announced the CFTC will launch an initiative for the use of tokenized collateral including stablecoins in derivatives markets.
“Since January, the CFTC has taken clear action to usher in America’s Golden Age of Crypto,” said Pham in a statement. “At our historic Crypto CEO Forum, we discussed how innovation and blockchain technology will drive progress in derivatives markets, especially for modernization of collateral management and greater capital efficiency. These market improvements will unleash U.S. economic growth because market participants can put their dollars to work smarter and go further.
“The public has spoken: tokenized markets are here, and they are the future. For years I have said that collateral management is the ‘killer app’ for stablecoins in markets. Today, we are finally moving forward on the work of the CFTC’s Global Markets Advisory Committee from last year. I’m excited to announce the launch of this initiative to work closely with stakeholders to enable the use of tokenized collateral including stablecoins.”
“The GENIUS Act creates a world in which payment stablecoins issued by licensed American companies can be used as collateral in derivatives and other traditional financial markets,” said Circle president Heath Tarbert, in a statement. “Using trusted stablecoins like USDC as collateral will lower costs, reduce risk, and unlock liquidity across global markets 24/7/365.”
“Stablecoins are the future of money, and tokenized collateral is just the beginning,” said Greg Tusar, VP of Coinbase Institutional Product, in a statement. “We commend Acting Chair Pham for recognizing the power of stablecoins to revolutionize our derivatives market, keeping pace with the regulatory innovation coming from the Administration and Congress. Now that stablecoins will be regulated under the GENIUS Act, it’s more imperative than ever to ensure that the US remains at the forefront of tokenized innovation.”
“During Acting Chairman Pham’s Crypto CEO Forum earlier this year, we discussed how the CFTC can partner with the industry to deliver on the innovations and products that have remained outside the United States, given the prior Administration’s approach,” said Kris Marszalek, co-founder and CEO of Crypto.com, in a statement. “We are pleased to support the recommendations advanced by the GMAC related to the use of non-cash collateral, including BTC and CRO, to satisfy regulatory margin requirements.”
“This CFTC initiative is an important step toward integrating stablecoins into the heart of regulated financial markets,” said Jack McDonald, SVP of Stablecoins at Ripple, in a statement. “Establishing clear rules for valuation, custody, and settlement will give institutions the certainty they need, while guardrails on reserves and governance will build trust and resilience. At Ripple, we believe tokenized collateral can drive greater efficiency and transparency in derivatives markets, strengthening US leadership in financial innovation.”
“The decision to recognize stablecoins as part of US market infrastructure is an important step toward strengthening the US’ leadership in global finance and in ensuring its markets remain competitive,” said Paolo Ardoino, CEO of Tether, in a statement. “Stablecoins, now a nearly $300 billion global market, are becoming a core building block of modern finance by enabling faster settlement, deeper liquidity, and greater market resilience. Tether welcomes the opportunity to share our experience in this sector to help ensure that the U.S. framework not only supports innovation, but also fortifies the stability of global markets.”
The CFTC’s Global Markets Advisory Committee (GMAC) released a recommendation last year by its Digital Asset Markets Subcommittee (DAMS) on expanding the use of non-cash collateral through distributed ledger technology. The President’s Working Group report directs the CFTC to “provide guidance on the adoption of tokenized non-cash collateral as regulatory margin to implement the CFTC’s GMAC DAMS recommendation.”
Acting chair Pham has previously proposed a CFTC pilot program as a US regulatory sandbox to provide regulatory clarity for digital asset markets and ensure that robust guardrails are in place. The CFTC has had success with pilot programs dating back to the 1990s.