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CFTC Provides Framework for Tokenized Collateral Testing
The Commodity Futures Trading Commission (CFTC) has launched a landmark pilot program designed to test how tokenized assets function within regulated U.S. financial infrastructure. The initiative represents one of the agency’s most consequential steps toward bringing digital instruments into established market frameworks.
Acting Chair Caroline Pham introduced the pilot in Washington, underscoring the growing need for safer, transparent venues for digital-asset activity. After years of losses stemming from lightly regulated offshore exchanges, she said U.S. participants require stronger oversight and clearer operating standards. According to Pham, the pilot gives regulators “real-time insight into how tokenized collateral behaves during volatile conditions,” enabling closer observation of custody, segregation, and valuation processes.
By establishing a controlled environment, the CFTC aims to assess operational risks while allowing the industry to continue exploring tokenized financial instruments without regulatory disruption.
Updated Guidance on Tokenized Assets
Coinciding with the pilot, the CFTC’s three divisions released newly updated guidance clarifying how tokenized assets fit within current regulatory expectations. This effort seeks to reduce uncertainty for financial institutions experimenting with digital settlement tools and on-chain collateral.
The guidance covers tokenized real-world assets such as U.S. Treasuries and money market funds, detailing expectations around custody standards, haircut methodologies, and operational risk controls. By setting these baseline requirements, the agency aims to promote consistency as more firms adopt blockchain-based settlement models.
Narrow Initial Phase for FCMs
As part of the broader policy shift, the CFTC also granted limited no-action relief to futures commission merchants (FCMs) willing to accept certain non-securities digital assets as margin. The initial phase is intentionally narrow: during the first 90 days, only BTC, ETH, and USDC qualify.
To strengthen oversight, participating FCMs must submit weekly reports outlining asset balances and must promptly notify regulators of any material incidents. These disclosures are intended to help the agency evaluate how digital collateral performs in real market environments before considering wider eligibility.
Retirement of Legacy Virtual-Currency Guidance
The new direction prompted the CFTC to formally withdraw a 2020 advisory that discouraged the use of virtual currencies as collateral. In its announcement, the agency said the document no longer reflects current market dynamics or developments introduced under the GENIUS Act. Retiring the older guidance removes an obstacle to innovation and better aligns the regulatory approach with present-day conditions.
The policy update was widely welcomed by major industry leaders. Coinbase Chief Legal Officer Paul Grewal said the decision underscores the efficiency of digital assets in payment systems. Circle President Heath Tarbert noted that regulated stablecoins could help reduce settlement delays and enable round-the-clock trading.
Crypto.com CEO Kris Marszalek called the shift a “notable milestone,” linking the move to broader national efforts to strengthen U.S. leadership in the digital-asset sector. Ripple executive Jack McDonald added that official recognition of tokenized collateral could enhance capital efficiency across U.S. markets.
Collaboration Shaped the Framework
The CFTC said the final structure of the pilot reflects recommendations from the Digital Asset Markets Subcommittee and incorporates feedback from recent industry forums. This collaborative approach signals the agency’s intent to refine the framework as real-world testing unfolds.
With the pilot now active, Bitcoin, Ethereum, and USDC will play a more formal role in U.S. derivatives markets. Regulators plan to analyze incoming data closely before determining whether broader adoption of tokenized collateral should follow.
