CFTC Moves Toward Accepting Stablecoins as Collateral
The US Commodity Futures Trading Commission is taking significant steps toward allowing tokenized assets, including major stablecoins, to serve as collateral in derivatives markets. Acting chair Caroline Pham announced on Tuesday that the agency will work closely with stakeholders on this initiative and is seeking public feedback until October 20.
This development represents a notable shift in how regulators view digital assets. If implemented, stablecoins like USDC and USDT would be treated similarly to traditional collateral such as cash or US Treasuries in regulated derivatives trading. The move comes after Congress passed legislation earlier this year to establish clearer rules for stablecoins, which have seen growing adoption among financial institutions.
Industry Leaders Voice Support
Major players in the crypto industry have expressed strong support for the CFTC’s proposal. Executives from Circle Internet Group, Tether, Ripple Labs, Coinbase, and Crypto.com all endorsed the initiative. Circle president Heath Tarbert noted that the GENIUS Act, signed into law by President Trump in July, creates a framework where “payment stablecoins issued by licensed American companies can be used as collateral in derivatives and other traditional financial markets.”
Tarbert emphasized the practical benefits, stating that using trusted stablecoins like USDC as collateral would “lower costs, reduce risk, and unlock liquidity across global markets 24/7/365.” Coinbase’s chief legal officer Paul Grewal echoed this sentiment, suggesting that tokenized collateral and stablecoins could “unlock US derivatives markets and put us ahead of global competition.”
Building on Previous Initiatives
The tokenized asset initiative builds on the CFTC’s Crypto CEO Forum and is part of the previously announced crypto sprint to implement recommendations from the President’s Working Group on Digital Asset Markets. The crypto CEO forum in February had already called for industry input on digital asset pilot programs and discussed using tokenized non-cash collateral.
This isn’t entirely new territory for the CFTC. The agency’s Global Markets Advisory Committee released recommendations last year from its Digital Asset Markets Subcommittee about expanding the use of non-cash collateral through distributed ledger technology. The current proposal seems to be a more concrete step toward implementing those earlier suggestions.
Broader Regulatory Shifts
Pham’s announcement coincides with other regulatory developments. Securities and Exchange Commission Chair Paul Atkins revealed the same day that his agency is working on an innovation exemption that would provide temporary relief from older securities rules while the SEC develops tailored crypto regulations.
Atkins had also announced Project Crypto in July, aiming to modernize securities rules around cryptocurrency and facilitate moving America’s financial markets onchain. These parallel developments suggest a coordinated, though perhaps not perfectly synchronized, effort across regulatory agencies to adapt to the growing presence of digital assets in financial markets.
The CFTC’s proposal represents what could be a significant step toward integrating digital assets into mainstream financial infrastructure. While the initiative still requires final regulations before implementation, the broad industry support and regulatory momentum suggest this could become reality sooner rather than later. The public comment period ending October 20 will likely provide valuable insights into both the opportunities and challenges of using stablecoins as collateral in derivatives markets.
