CFTC Unveils Framework That Could Reshape How Crypto Is Used on Wall Street

The U.S. derivatives market moved closer to integrating digital assets on Monday after the Commodity Futures Trading Commission (CFTC) unveiled a pilot program that allows select cryptocurrencies and stablecoins to be used as collateral for regulated futures and swaps.

Under the initiative, qualified futures commission merchants (FCMs) may now accept Bitcoin, Ether and payment stablecoins such as USD Coin as margin collateral. The program represents one of the most direct acknowledgments yet by a U.S. regulator that digital assets are moving into the infrastructure layer of traditional financial markets.

Acting CFTC Chairman Caroline Pham said the pilot is designed to introduce tokenized collateral under clear regulatory guardrails. 

“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,” Pham said.

Regulated Test for Crypto Collateral

For now, participation is limited to FCMs that meet strict operational, custody and risk-management thresholds. These firms may accept BTC, ETH and approved payment stablecoins as collateral for futures and swaps, but only under enhanced supervision.

During the first three months of the program, participating firms must file weekly disclosures detailing their digital asset holdings and immediately alert the CFTC to any cybersecurity breaches, custody failures or valuation issues. The regulator is using the early phase to closely evaluate how crypto collateral behaves under real trading conditions.

In practical terms, the pilot could allow a registered derivatives broker to accept Bitcoin as margin for a leveraged commodities or interest-rate swap, while regulators monitor the operational risks behind the scenes. 

The goal is to determine whether digital assets can meet the same reliability standards as cash or U.S. Treasuries in stressed market environments.

Also read: BPCE to Let Millions of French Bank Customers Trade Bitcoin, Ethereum, Solana, USDC In-App

No-Action Relief and Policy Resets

Alongside the pilot, the agency issued a no-action letter granting FCMs limited authority to hold certain digital assets in segregated customer accounts, provided firms implement robust internal controls and continuous risk oversight.

The CFTC also formally withdrew guidance issued in 2020 that had discouraged the use of crypto as collateral in regulated markets. That advisory had long been viewed by industry participants as a major barrier to broader institutional crypto adoption, effectively blocking its utility within traditional trading infrastructure.

Regulators now consider that framework outdated following the passage of the GENIUS Act, which updated federal rules governing digital assets, stablecoins and tokenization.

Stablecoins and Tokenized Treasuries in Focus

The pilot builds on earlier work by the CFTC to allow stablecoins to be used as collateral for certain products. Payment stablecoins are increasingly viewed as a bridge between blockchain settlement and traditional finance because of their price stability and near-instant transfer features.

Beyond cryptocurrencies, the regulator emphasized that tokenized versions of real-world assets — particularly U.S. Treasuries — remain a central focus of its long-term strategy. While the agency’s rules remain technology-neutral, officials stressed that tokenized assets must still meet enforceability, custody and valuation standards to qualify as acceptable collateral.

That distinction is becoming increasingly important as Wall Street institutions and crypto-native firms race to tokenize government bonds, money-market funds and other low-risk instruments for use across clearing, lending and settlement systems.

Also read: Europe’s $2.3T Asset Giant Amundi Rolls Out Tokenized Fund on Ethereum

Industry Welcomes the Shift

Industry leaders praised the move as a long-awaited step toward regulatory clarity. Coinbase Chief Legal Officer Paul Grewal said the pilot reflects the intent of recent legislative efforts to integrate digital assets directly into U.S. market infrastructure rather than pushing innovation overseas.

“This major unlock is precisely what the Administration and Congress intended the GENIUS Act to enable,” Grewal said in a statement shared by the CFTC.

If successful, the pilot could pave the way for broader acceptance of digital assets across U.S. clearing, margining and settlement systems. For now, the regulator is keeping the program tightly controlled — signaling cautious optimism as crypto inches closer to the heart of regulated financial markets.