CFTC Acting Chair Caroline Pham Clears Bitcoin, Ethereum, USDC For Use As Collateral In Derivatives Pilot

The CFTC has launched a limited pilot program that allows Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and USDC (CRYPTO: USDC) to be used as in-kind collateral for derivatives contracts denominated in the same assets.

What Happened: Speaking on CNBC's Squawk Box on Wednesday, acting chair Caroline Pham explained that the pilot includes strict safeguards.

Only CFTC-registered intermediaries can participate, collateral must match the underlying assets of the contract (for example, BTC for BTC futures), and firms must comply with enhanced monitoring and weekly reporting.

The goal is to safely test digital-asset collateral under direct U.S. regulatory oversight.

The agency also released separate guidance on broader tokenized collateral, such as tokenized Treasuries, money market funds, and stablecoins, developed with input from major institutions including JPMorgan, BlackRock, and Franklin Templeton.

This framework relies on existing CFTC rules covering liquidity requirements, legal enforceability, and margin haircuts, applying a technology-neutral approach.

Also Read: Cathie Wood Says Bitcoin Is ‘Climbing A Wall Of Worry’

Why It Matters: Pham stressed that the move is partly aimed at addressing extreme leverage and liquidation risks prevalent on offshore, unregulated crypto exchanges.

Bringing crypto derivatives activity into the U.S. regulatory perimeter, she argued, provides stronger customer protections and aligns with the robust standards long applied in traditional futures markets.

Pham has also been instrumental in advancing U.S. spot crypto market infrastructure, personally engaging with multiple platforms interested in offering spot crypto products.

Read Next:

• Peter Schiff Slams Michael Saylor’s Bitcoin Strategy As ‘Total….’

Image: Shutterstock