Historic Breakthrough for CFTC! Bitcoin, Ethereum, and USDC Approved as Collateral

The U.S. Commodity Futures Trading Commission (CFTC) has launched a digital asset pilot program that allows Bitcoin, Ethereum, and payment stablecoins such as USDC to be used as collateral in the U.S. derivatives market. The program is only available to futures commission merchants (FCMs) that meet certain criteria. These firms can accept BTC, ETH, and USDC as margin collateral for futures and swaps trading, but must comply with strict reporting and custody requirements.

Three Core Elements of the Pilot Program

The CFTC’s digital asset pilot program is built on a rigorous regulatory framework. First, participation eligibility is strictly limited. Only FCMs that meet specific criteria can participate, and these firms must demonstrate technical capability and risk management systems for handling digital assets. This high entry threshold ensures that only the most professional market participants can enter this emerging field.

Second, the reporting requirements are extremely stringent. During the first three months, participating FCMs must disclose their digital asset holdings on a weekly basis and report any issues to the CFTC. This high-frequency oversight mechanism enables regulators to keep abreast of market developments in real time and detect potential risks early. Pham emphasized in a statement: “The program will establish clear safeguards to protect customer assets and provide enhanced CFTC monitoring and reporting mechanisms.”

Third, custody arrangements must meet strict standards. The CFTC’s no-action letter allows FCMs, under prudent risk management, to hold certain digital assets in segregated customer accounts on a limited basis. This means that clients’ Bitcoin, Ethereum, or USDC will not be commingled with company assets, ensuring asset security.

Practical Application Scenarios for Bitcoin, Ethereum, and USDC

In practice, this could mean that a registered company accepts Bitcoin as collateral for leveraged swaps linked to commodities, while the CFTC monitors operational risks and custody arrangements in the background. For example, if an investor wants to take a long position in crude oil futures, they would traditionally need to deposit U.S. dollars as margin. Under the new rules, the investor can deposit Ethereum or USDC, which the FCM will treat as eligible collateral and value according to real-time market prices.

The inclusion of USDC as a payment stablecoin in the pilot program carries special significance. Earlier this year, the CFTC began allowing stablecoins to be used as collateral for certain products. Since stablecoins are pegged to the U.S. dollar, their price volatility is much lower than that of Bitcoin and Ethereum, providing a more stable collateral option for the derivatives market. At the same time, the instant settlement capability of stablecoins also significantly improves market efficiency.

Withdrawing the 2020 Legacy Guidance Policy Bonus

It is worth noting that the CFTC has withdrawn its previous guidance issued in 2020, which in many cases effectively prevented cryptocurrencies from being used as collateral. Especially after the passage of the GENIUS Act, the guidance was considered outdated, as the act updated federal regulations on digital assets. This policy shift demonstrates that regulators are actively adapting to the digital asset era.

Industry leaders have praised this move. Paul Grewal, Chief Legal Officer of the largest compliant crypto exchange in the U.S., said in a statement issued by the CFTC: “This significant opening is exactly what the government and Congress intended with the passage of the GENIUS Act.” The CFTC emphasized that its rules remain technology-neutral but stated that real-world tokenized assets such as government bonds must still meet enforceability, custody, and valuation standards. This balanced regulatory approach leaves room for innovation while ensuring market stability.