CFTC Plans to Approve Stablecoins as Collateral in Derivatives

Key Insights:

• CFTC may approve stablecoins like USDC and USDT as derivatives collateral.

• Public comments are open until October 20; top crypto firms support the move.

• The initiative follows the GENIUS Act, advancing tokenized finance in the U.S.

The U.S. Commodity Futures Trading Commission (CFTC) is taking a major step toward integrating tokenized assets into traditional finance.

Acting Chair Caroline Pham announced that the agency is exploring a proposal to allow stablecoins and tokenized assets to be used as collateral in regulated derivatives markets, a move that could reshape how institutional investors manage risk.

Speaking on Tuesday, Pham said the CFTC will “work closely with stakeholders” and is welcoming public comments on the initiative through October 20. The plan has received strong support from major crypto firms, including Circle, Tether, Ripple, Coinbase, and Crypto.com.

“The public has spoken: tokenized markets are here, and they are the future,” said Pham. “For years, I’ve said that collateral management is the killer app for stablecoins in markets.”

If implemented, the policy would allow widely used stablecoins like USDC and USDT to be treated the same as traditional forms of collateral such as cash or U.S. Treasurys in regulated derivatives trading.

Why It Matters for U.S. Investors and the Crypto Market

The move signals a major shift in how regulators view stablecoins, which have grown rapidly in adoption but often existed in legal gray areas.

By allowing them to back derivative trades, the CFTC would effectively recognize stablecoins as institution-grade financial tools, legitimizing their use in complex trading environments.

For U.S. investors, this could translate into greater flexibility and efficiency in margin management, opening up more avenues to leverage crypto-backed instruments without needing to exit into fiat.

It could also encourage more institutions to enter the digital asset space, knowing that stablecoins are gaining regulatory approval for real-world use cases.

This development builds on recent policy progress, including the passage of the GENIUS Act, signed by President Donald Trump in July.

While the GENIUS Act sets a regulatory foundation for payment stablecoins, the CFTC’s new collateral policy is one of the first signs of practical application within traditional financial systems.

Paul Grewal, Coinbase’s Chief Legal Officer, endorsed the plan, stating on X (formerly Twitter), “Tokenized collateral and stablecoins can unlock U.S. derivatives markets and put us ahead of global competition.”

With strong backing from both crypto and traditional finance stakeholders, the CFTC’s stablecoin collateral initiative could mark the next major phase in the tokenization of traditional markets.