CFTC Explores Tokenized Collateral in Derivatives Markets

The Commodity Futures Trading Commission is launching a tokenized collateral initiative involving stablecoins.

The federal financial regulator said the program would look at the use of tokenized collateral in derivatives markets, according to a Wednesday (Sept. 24) press release.

“The public has spoken: Tokenized markets are here, and they are the future,” acting CFTC Chair Caroline Pham said in a news release. “For years, I have said that collateral management is the ‘killer app’ for stablecoins in markets. Today, we are finally moving forward on the work of the CFTC’s Global Markets Advisory Committee from last year. I’m excited to announce the launch of this initiative to work closely with stakeholders to enable the use of tokenized collateral, including stablecoins.”

Heath Tarbert, president of USDC stablecoin issuer Circle, said in the release that the GENIUS Act has set the stage for stablecoins to be used as collateral in derivatives and other traditional financial markets.

“Using trusted stablecoins like USDC as collateral will lower costs, reduce risk and unlock liquidity across global markets 24/7/365,” Tarbert said.

The CFTC is inviting interested stakeholders to offer feedback and suggestions on the use of tokenized collateral in derivatives markets, the release said. Members of the public can provide their input by Oct. 20 on the commission’s website.

Meanwhile, a sister piece of legislation to the GENIUS Act, the CLARITY Act, is being held up while the CFTC waits for a new official chair.

Implementation of the CLARITY Act, a key tentpole in President Donald Trump’s promise to make the United States the “crypto capital of the world,” would require robust leadership at the CFTC, PYMNTS reported Monday (Sept. 23).

“But because the chairman has yet to be confirmed, the agency is operating at reduced capacity and could risk lacking a quorum or even basic leadership during a phase when the burden of regulatory change will be heavy,” the report said.

Brian Quintenz, Trump’s nominee, has reportedly run afoul of politically powerful crypto industry figures who are said to be hindering his path to the leadership role.