CFTC Launches Plan to Enable Use of Tokenized Collateral in Derivatives Markets

“Since January, the CFTC has taken clear action to usher in America’s Golden Age of Crypto,” Pham said 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.”

The CFTC’s Global Markets Advisory Committee (GMAC) released a recommendation last year 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.”

Crypto executives applauded the announcement. “This CFTC initiative is an important step toward integrating stablecoins into the heart of regulated financial markets,” Jack McDonald, SVP of Stablecoins at Ripple, said in a statement accompanying the announcement.  “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.”

Read more: Cracks Appear in Senate GOP Support for Crypto Market-Structure Bill

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Tuesday’s announcement follows passage of the GENIUS Act that established a regulatory framework for the trading and issuance of stablecoins.

“Stablecoins are the future of money, and tokenized collateral is just the beginning,” Greg Tusar, VP of Coinbase Institutional Product, said in a statement. “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.”

Another tentpole of the Trump administration’s plan to spur the use of crypto in financial trades, the Clarity Act market structure bill, was passed by the House in July but stalled in the Senate. The upper chamber is currently debating its own crypto market-structure bill but it, too, has run into opposition.

A key feature of the Clarity Act is a division of oversight responsibility for different types of crypto assets between CFTC and the Securities and Exchange Commission (SEC). Opponents of the bill in the Senate favor giving greater responsibility to CFTC.

The two agencies will hold a joint public roundtable on Monday (9/29) as part of an effort to harmonize regulations around securities and derivatives, including crypto, which are now divided between them.

“To the extent possible and appropriate in the public interest under existing statutes, our respective agencies should consider harmonizing product and venue definitions; streamlining reporting and data standards; aligning capital and margin frameworks; and standing up coordinated innovation exemptions using each agency’s existing exemptive authority,” the agencies said in a joint staff statement. “This roundtable represents a pivotal step toward building more coherent and competitive U.S. markets.”

Speakers at the roundtable will include academics and former regulators, representatives of financial exchanges, and market participants.