The CFTC has announced it is launching a pilot crypto program for digital assets, including bitcoin and stablecoins, to be used as collateral in derivatives markets. The agency also revised its guidance on tokenized collateral and withdrew “outdated requirements” following the enactment of the GENIUS Act.
Commodity Futures Trading Commission Acting Chairman Caroline D. Pham announced the pilot progam on Monday shortly after markets closed. “Under my leadership this year, the CFTC has led the way forward into America’s Golden Age of Innovation and Crypto. This imperative has never been more important given recent customer losses on non-U.S. crypto exchanges. Americans deserve safe U.S. markets as an alternative to offshore platforms, and that’s why last week I announced that spot crypto can now be traded on CFTC registered exchanges,” Pham said. “Today, I am launching a U.S. digital assets pilot program for tokenized collateral, including bitcoin and ether, in our derivatives markets that establishes clear guardrails to protect customer assets and provides enhanced CFTC monitoring and reporting.”
She went on to explain the revisions to existing guidance and regulations to derivatives markets that were previously strict on crypto. “The CFTC is also providing regulatory clarity through tokenized collateral guidance for real world assets like U.S. Treasuries, and withdrawing CFTC requirements that are now outdated under the GENIUS Act. As I’ve said before, embracing responsible innovation ensures that U.S. markets are the world leader, and drives progress that will unleash U.S. economic growth because market participants can safely put their dollars to work smarter and go further.”
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More on the Program, Updated Guidance, and Crypto Industry’s Reaction
The guidance highlights that CFTC regulations are technology-neutral and encourages the analysis of tokenized assets on an individual basis in accordance with the CFTC’s existing regulatory framework and firms’ policies and procedures. The guidance applies to tokenized RWA, including U.S. Treasury securities and money market funds. Furthermore, the CFTC also issued a no-action position with respect to certain requirements applicable to Futures Commission Merchants (FCMs) that accept non-securities digital assets, including payment stablecoins, as customer margin collateral or hold certain proprietary payment stablecoins in segregated customer accounts.
Paul Grewal, the Chief Legal Officer of Coinbase, who has been vocal on government regulation of crypto, praised the decision by the CFTC. “The CFTC’s decision confirms what the crypto industry has long known: That stablecoins and digital assets can make payments faster, cheaper, and reduce risk,” he said in a statement. “We applaud Acting Chair Caroline Pham and the CFTC for swiftly recognizing that tokenized innovation is the future of finance, and thank Acting Chair Caroline Pham for her leadership and vision. This major unlock is precisely what the Administration and Congress intended the GENIUS Act to enable—and will allow digital innovation to transform and improve traditional areas of finance.”
The CFTC’s crypto pilot program takes effect immediately.