CFTC to Allow Tokenized Collateral for Derivative Market

Key Highlights

• U.S CFTC has given a green light to the use of stablecoins like USDC and USDT as legitimate collateral for the derivative market

• The initiative is designed to make financial markets more efficient by using blockchain technology
• The CFTC is now seeking feedback and suggestions on specific implementation details until October 20. 

On September 24, the U.S. Commodity Futures Trading Commission (CFTC), which oversees the American derivatives market, announced that tokenized collateral, including stablecoins, can now be used as collateral for various financial products, including futures, swaps, and options. 

CRYPTO SPRINT: @CFTC launches tokenized collateral and stablecoins initiative with industry partners. It’s the killer app to modernize markets and make dollars work smarter and go further, unleashing U.S. economic growth by lowering costs 🇺🇸 @circle @coinbase @cryptocom… pic.twitter.com/VLCeGNS6K5

— Caroline D. Pham (@CarolineDPham) September 23, 2025

CFTC Embraces Tokenization Wave

Acting CFTC Chair Caroline Pham called the initiative a way to “modernize markets and make dollars work smarter.” 

The decision comes after months of discussion between regulators and major cryptocurrency companies, including Circle, Coinbase, and Tether. 

This initiative will make the U.S. the first regulator to have formally recognized these digital assets as acceptable security for traditional financial instruments.

U.S. CFTC has approved the use of stablecoins as legitimate collateral in derivatives markets. This decision could transform how trillions of dollars in financial contracts are secured and managed.

“The public has spoken: tokenized markets are here, and they are the future. For years, I have said that collateral management is the ‘killer app’ for stablecoins in markets. Today, we are finally moving forward on the work of the CFTC’s Global Markets Advisory Committee from last year. I’m excited to announce the launch of this initiative to work closely with stakeholders to enable the use of tokenized collateral including stablecoins. The CFTC continues to move full speed ahead at the cutting edge of responsible innovation, and I appreciate the support of our industry partners,” Acting Chairman Caroline Pham said in a press release.

By allowing stablecoins to serve as collateral, the CFTC is planning to increase market efficiency and reduce costs for financial institutions.

The new policy addresses a fundamental aspect of derivatives trading, which is collateral requirements. 

Currently, institutions must set aside significant amounts of cash or securities to secure their derivatives positions. Stablecoins can make this process faster and more efficient by enabling instant transfers through blockchain technology. This could free up billions of dollars currently tied up in traditional collateral arrangements.

Circle, the company behind the USDC stablecoin, praised the move as a positive step for well-functioning markets. Coinbase described stablecoins as “the future of money,” while Ripple highlighted potential efficiency gains in financial contracts. 

The CFTC is now seeking public feedback on specific implementation details until October 20. 

This feedback will help regulators focus on some crucial considerations. This includes how to properly value stablecoins, ensure secure custody solutions to prevent theft, and integrate the new system with existing financial infrastructure. 

The feedback will help in preparing a potential pilot program that could launch in early 2026.

This decision to use tokenized assets in traditional finance shows the growing acceptance of blockchain technology in traditional finance. 

The tokenization of real-world assets like real estate or commodities has grown from $300 million in 2023 to $24 billion by June 2025, according to the Real-World Assets in On-chain Finance Report. 

U.S. Treasury bonds, like BlackRock’s BUIDL ($2.1B AUM by April 2025) and Ondo Finance’s OUSG/USDY ($1B combined), lead this trend with impressive figures in tokenized assets. This allows investors to earn yields without traditional intermediaries.

Major financial institutions are already exploring these opportunities. BlackRock has tokenized $500 million in bonds on the Ethereum blockchain last year. Also, the New York-based firm is exploring how to tokenize ETFs linked to real-world assets such as stocks, subject to regulatory considerations.

The company introduced BUIDL, a digital money-market fund, which has grown to over $2 billion in value.

Trump’s Administration Focuses on Digital Assets and Blockchain Tech

The CFTC’s decision comes during a major regulatory change supporting digital assets under U.S. President Donald Trump’s crypto-friendly administration. 

The GENIUS Act, signed into law in July 2025, established the first comprehensive federal framework for stablecoins. This legislation requires regular audits, anti-money laundering compliance, and clear rules for consumer protection. It is creating a more stable environment for digital asset innovation.

For traditional financial markets, this development shows an important step toward integrating blockchain technology into mainstream finance. Derivatives markets handle approximately $20 trillion in transactions, and even small efficiency improvements could generate impressive cost savings. 

The ability to use stablecoins as collateral could particularly benefit institutions that engage in international trading, where traditional settlement systems can be slow and expensive.

On one hand, the U.S. is embracing tokenization; on the other hand, China recently instructed some of its brokerages to pause their real-world asset (RWA) tokenization projects in Hong Kong.