Overview
On September 23, 2025, the CFTC launched a Tokenized Collateral and Stablecoins Initiative.1 The agency invited public input on the use of tokenized non-cash collateral in derivatives markets, including potential rule amendments, pilot programs, valuation, custody, settlement, and whether the CFTC should observe industry efforts. The public comment portal opened the same day. The agency highlighted the CFTC's Global Markets Advisory Committee (GMAC) recommendations on tokenized non-cash collateral2 and linked the effort to the President's Working Group report discussion of collateral management. The release references a comment window that closes on October 20, 2025.
Why this matters
The CFTC has launched an initiative to enable tokenized collateral, including stablecoins, in derivatives markets. This moves collateral management toward on-chain workflows, with implications for margin efficiency, custody, valuation, portability, and risk. Firms that post, hold, or accept collateral in futures, options, and swaps should evaluate technology, legal terms, and supervisory controls now. The initiative points to tangible rule updates and pilot activity on a short timetable.
Context: this was expected
In November 2024, the GMAC, sponsored by then-Commissioner and now Acting Chair Caroline Pham, advanced recommendations to expand the use of non-cash collateral through distributed ledger technology. The GMAC materials emphasized that tokenization can wrap assets already eligible under CFTC frameworks, and that existing policies and controls, if applied to DLT rails, can manage key legal, custody, credit, and operational risks. The current CFTC action aligns with those recommendations and follows recent leadership changes and priorities emphasizing market structure and digital-asset engagement.
Who is affected
Derivatives clearing organizations, futures commission merchants, swap dealers, major swap participants, clearing members, and end users that post or receive collateral are in scope. The initiative raises operational, legal, and prudential issues for any participant that treats non-cash assets as margin or eligible investments, or that seeks to tokenize collateral movements within or across clearing, bilateral, and tri-party contexts. The breadth of the request for input signals potential impacts across cleared and uncleared markets.
Regulatory backdrop TO should consider
In general, CFTC rules do not bar tokenization by name; however, rules address risk, custody, and investment guardrails that the tokenized collateral program must satisfy. Part 39 of the CFTC's regulations sets DCO core principles, including risk management and treatment of funds. Section 39.13 requires risk-based margin models calibrated to product and portfolio risk.3 Section 39.15 requires holding member and customer funds and assets to minimize loss or delay in access, which frames custody and segregation choices for tokenized forms.4 Part 1 addresses customer fund protection. Section 1.20 requires FCM segregation of customer funds.5 Section 1.25 prescribes permitted investments for customer money,6 which informs how tokenized collateral interacts with investment, liquidity, and repo practices.
Interaction with existing eligibility concepts
GMAC materials state that tokenization changes the transfer mechanism, not the underlying asset's character.7 Where a registrant accepts eligible non-cash collateral in tokenized form, the registrant should be able to meet relevant requirements by applying existing policies and procedures to legal enforceability, segregation and custody, credit and custodial risk, and operational risk. The GMAC also framed tokenization as a way to address frictions that impede broader use of non-cash collateral, such as sequential intermediaries, limits on secondary transfers, and the lack of continuous settlement capabilities. The CFTC’s press release builds on this record and asks how to incorporate tokenized forms into regulatory margin, valuation, settlement finality, and oversight.
Leadership and timing signals
Acting Chair Pham was designated acting chairman in January 2025 and has emphasized structured engagement with market participants. The CFTC has refreshed GMAC membership and subcommittee leadership. Combined with the September 23 press release and the active comment docket, the record indicates near-term staff work on scoping, with a path to proposed amendments. Contact us to discuss opportunities to engage with the CFTC in this process.
Key legal and risk questions you should analyze now
Valuation and haircuts require clarity, including how to calibrate model parameters for on-chain settlement risk, issuer or reserve risk for stablecoins, liquidity under stress, and basis risk versus cash.
- DCO and FCM custody must map token control, private-key governance, and wallet architecture to segregation rules and account structures, with clear legal opinions on control and perfection, and with playbooks for default, recovery, and insolvency.
- Treatment of customer funds and investments must respect Part 1 limits, including Section 1.25 permitted investments and liquidity requirements, even when the collateral moves on chain.
- Operational resilience should address smart-contract risk, chain outages, forks, and oracle integrity, with tested fallback and reconciliation between ledger records and books and records.
- Supervisory frameworks should define onboarding standards for tokenized forms, counterparty eligibility, concentration limits, collateral substitution rules, settlement cut-offs, and dispute processes.
These issues follow directly from Part 39 and Part 1 requirements and from the GMAC recommendations.
Action items
- Identify where your firm uses, accepts, rehypothecates, or invests non-cash collateral.
- Map those workflows to tokenized rails and define the legal, risk, and operational controls needed to meet Part 39 and Part 1 requirements.
- Draft comment positions on custody models, wallet control and segregation, eligible asset scope and haircuts, valuation sources and governance, cross-chain settlement, default playbooks, and supervisory reporting.
- Align front office, treasury, operations, risk, compliance, and technology on change management plans.
- Track the public comment docket and prepare for industry working sessions. We are happy to work with you to submit comments by October 20, 2025.
What to watch next
We see continued momentum: Watch for a staff roundtable or GMAC session that narrows scoping questions. Monitor whether the CFTC pursues a pilot for tokenized collateral movements under controlled parameters, including reporting, concentration limits, and contingency arrangements. We expect coordination with banking and securities regulators on stablecoin reserve, disclosure, and custody topics, and with international standard setters.
1 CFTC Release Number 9130-25, Acting Chairman Pham Launches Tokenized Collateral and Stablecoins Initiative (Sept. 23, 2025), available at https://www.cftc.gov/PressRoom/PressReleases/9130-25.
2 CFTC Release Number 9009-24, CFTC’s Global Markets Advisory Committee Advances Recommendation on Tokenized Non-Cash Collateral (Nov. 21, 2024) available at https://www.cftc.gov/PressRoom/PressReleases/9009-24
3 See 17 CFR 39.13, available at https://www.ecfr.gov/current/title-17/section-39.13
4 See 17 CFR 39.15, available at https://www.ecfr.gov/current/title-17/section-39.15.
5 See 17 CFR 1.20, available at https://www.ecfr.gov/current/title-17/section-1.20.
6 See 17 CFR 1.25, available at https://www.ecfr.gov/current/title-17/section-1.25.
7 See Report To The Commodity Futures Trading Commission’s Global Markets Advisory Committee By The Digital Asset Markets Subcommittee, Recommendations to Expand Use of Non-Cash Collateral through Use of Distributed Ledger Technology, available at https://www.cftc.gov/media/11581/GMAC_DAM_UseofDLTasDerivativesCollateral_112124/download
