Caroline Pham, the acting chair of the U.S. Commodity Futures Trading Commission (CFTC), recently announced the launch of a 'Digital Asset Pilot Program' allowing certain cryptocurrencies to be used as collateral in the U.S. derivatives market.
Caroline Pham stated that the program will initially be limited to Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC). She noted in a statement:
'I have emphasized in the past that embracing responsible innovation can ensure that the U.S. market remains a leader globally and drives economic growth, as market participants can utilize funds more safely and efficiently.'
This pilot program continues the CFTC's reform efforts initiated in September, which aim to expand the use of 'tokenized collateral' such as stablecoins in the derivatives market. As the only current commissioner of the CFTC, Caroline Pham has been actively promoting the agency's regulatory stance in the crypto space. Just last week, she announced that Bitnomial became the first exchange to receive regulatory approval to list spot trading of cryptocurrencies. Previously, Pham had pushed the 'Crypto Sprint' initiative to clarify crypto regulatory rules and proposed a pilot 'digital asset regulatory sandbox' in the U.S.
Currently, this pilot program applies only to futures commission merchants (FCMs) that meet specific conditions. These institutions can accept payment stablecoins like BTC, ETH, and USDC as margin collateral for futures and swap contracts, but must adhere to strict reporting and custody regulations. In the first three months of the pilot, they must disclose their holdings of digital assets weekly and immediately report to the CFTC if any issues arise.
In practice, this could mean that a compliant institution can accept Bitcoin as collateral for leveraged swaps, while the CFTC monitors its operational risks and custody arrangements.
The CFTC also issued a 'no-action letter' allowing FCMs to store a limited amount of digital assets in segregated customer accounts under strict risk management. Notably, the CFTC simultaneously withdrew an old guideline from 2020—this guideline had previously hindered the use of crypto assets as collateral in many cases. With the passage of the (GENIUS Act) updating federal digital asset regulatory rules, that old guideline is now outdated.
Industry leaders generally express support for this move. Coinbase's Chief Legal Officer Paul Grewal stated in a declaration quoted by the CFTC that:
This significant breakthrough is exactly the result that the executive branch and Congress hoped to achieve when they established the (GENIUS Act).
The CFTC emphasized that its regulatory principles remain 'technologically neutral', but also pointed out that even assets like tokenized U.S. Treasury securities must still comply with enforceability, custody, and valuation standards.
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