CFTC IPO allows cryptocurrencies to be used as collateral for derivatives Bitcoin, Ether, and USDC to officially “enter” the US financial system

The Zhitong Finance App learned that the US Commodity Futures Trading Commission (CFTC) will allow the use of Bitcoin, Ether, and USDC, a stablecoin linked to the US dollar, as collateral for derivatives transactions. This decision has pushed cryptocurrencies deeper into the infrastructure of the US financial system.

The initiative, which was launched in the form of a pilot project, was published in the form of two staff proposals and a letter of no objection sent to the Coinbase financial market, and is applicable to futures brokers, exchange market participants, and clearing houses. The guidance on collateral also includes tokenized versions of US Treasury bonds and money market funds, and sets out clear requirements for asset segregation, reporting, and monitoring.

Ryne Miller, partner at Lowenstein Sandler, said: “It's encouraging to see the US continue to consciously focus on creating a clear path for innovation and development in the derivatives market.”

Tokenized assets refer to the digital representation of real-world assets or financial assets on a blockchain (a type of digital ledger). Although they do not represent a direct claim to the assets themselves, supporters believe this process will increase liquidity, support fragmented ownership of assets, and may make it easier for overseas investors to enter the US market.

Last week, Acting Chairman Caroline Pham announced that CFTC-regulated exchanges can begin trading spot cryptocurrencies on derivatives exchanges. Generally, the agency can only regulate derivative products and not their underlying assets, unless fraud or manipulation is involved.