The US Commodity Futures Trading Commission is considering allowing tokenized assets, such as stablecoins, to be used as collateral in futures markets, a move that crypto executives welcome.
Caroline Pham, the acting head of the CFTC, stated on Tuesday that her organization will “work closely with stakeholders” on the plan and is seeking input on the use of tokenized collateral in derivatives markets until October 20. The public has made it clear that tokenized marketplaces are the way of the future. She has been saying for years that the “killer app” for stablecoins in markets is collateral management.
In regulated derivatives trading, stablecoins like USDC and Tether would be considered similarly to conventional collateral like cash or US Treasurys if they were put into use. Stablecoins have been more popular among financial institutions after Congress established regulations governing them earlier this year.
Heavyweight cryptocurrency stablecoins make a comeback
The CFTC’s action was endorsed by cryptocurrency officials from Coinbase, Crypto.com, Tether, Ripple Labs, and stablecoin issuer Circle Internet Group.
According to Heath Tarbert, president of Circle, the GENIUS Act allows payment stablecoins produced by authorized U.S. businesses to be used as collateral in derivatives and other traditional financial markets.
According to Tarbert, using reliable stablecoins like USDC as collateral will save expenses, lessen risk, and open liquidity on international markets around-the-clock.
The GENIUS Act was signed into law by US President Donald Trump in July. Although it is currently awaiting final regulations before implementation, its goal is to clearly define rules for payment stablecoins.
The move was also supported by Coinbase Chief Legal Officer Paul Grewal, who stated in a Tuesday X post that “tokenized collateral and stablecoins can unlock US derivatives markets and put us ahead of global competition.”
Senior vice president of stablecoins at Ripple, Jack McDonald, stated that the CFTC’s plan is a significant step in bringing stablecoins into the “heart of regulated financial markets” and promoting more transparency and efficiency in the derivatives markets.
“Clear guidelines for valuation, custody, and settlement will provide the confidence that institutions require, and governance and reserve boundaries will foster resilience and trust.”
Since early 2025, the initiative has been underway
The tokenized asset effort, according to Pham, will expand upon the CFTC’s Crypto CEO Forum and is a component of the previously announced crypto sprint to implement the recommendations of the President’s Working Group on Digital Asset Markets.
In February, the CEO forum for the cryptocurrency sector asked for feedback on a planned pilot program for digital assets and talked about the usage of tokenized non-cash collateral.
Last year, the Digital Asset Markets Subcommittee of the CFTC’s Global Markets Advisory Committee suggested using distributed ledger technology to increase the usage of non-cash collateral.
The US crypto regulatory environment is evolving
Pham made his announcement on the same day that Paul Atkins, the chair of the Securities and Exchange Commission, announced that his organization is developing an innovation exemption that would serve as a regulatory carve-out, providing short-term relief for cryptocurrency companies from previous securities regulations while the SEC creates customized regulations.
In July, he also unveiled Project Crypto, which aims to update cryptocurrency securities rules and regulations while also moving America’s financial markets on blockchain.
