Overview
On September 23, 2025, the CFTC launched a Tokenized Collateral and Stablecoins Initiative that invites interested stakeholders to submit feedback and suggestions on the use of tokenized collateral including stablecoins in derivatives markets.1 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.3 Subject areas include the CFTC's GMAC recommendation; CFTC observer status on industry efforts; potential digital asset markets pilot programs; amendments to CFTC regulations in connection with the President's Working Group report recommendations regarding collateral management (pages 52-53), and other related issues. The comment window closes on October 20, 2025.
Action items
- Consider drafting 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.
- Track the public comment docket and prepare for industry working sessions.
- Submit comments on or before October 20, 2025.
Why this matters
Regulatory action by the CFTC or its operating divisions and offices would help move collateral management toward on-chain workflows, with implications for margin efficiency, liquidity management, custody, valuation and portability. The CFTC and its operating divisions appear likely to address the usage of tokenized forms of existing eligible collateral types. The Tokenized Collateral and Stablecoins Initiative signals regulatory action that would expand the scope of legally permissible collateral for CFTC registrants. CFTC registrants including derivatives clearing organizations (DCO), swap dealers (SD), and futures commission merchants (FCM), as well as service providers and institutions such as depositories and custodians, should consider submitting comment letters.
Context
In November 2024 the GMAC, sponsored by the CFTC's then-Commissioner and now Acting Chairman Caroline Pham, advanced recommendations to expand the use of non-cash collateral in cleared and uncleared derivatives markets through distributed ledger technology (DLT). The GMAC materials emphasized that tokenization can wrap assets already deemed eligible under existing CFTC regulation, and that existing policies and controls, if applied to DLT rails, can manage key legal, custody, credit, and operational risks. The initiative aims to build from those recommendations while capitalizing on recent leadership changes and the Administration's digital asset and market structure priorities.
Who is affected
CFTC registrants, including DCOs, SDs and FCMs, subject to mandatory margin obligations would likely be impacted by any changes in regulation or guidance. In addition, the initiative raises operational, legal, and prudential considerations for any derivatives market participant exchanging non-cash margin, or that seeks to tokenize collateral movements, either in bilateral or clearing contexts.
Regulatory backdrop and eligibility
CFTC rules do not prohibit the exchange of tokenized or any other forms of eligible or permissible forms of collateral.4 For example, the GMAC recommendation release provides that tokenization changes the transfer mechanism, not the underlying asset’s character.5 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 Digital Asset Markets Subcommittee 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 requirements.
Specifically, the CFTC requests input on these GMAC recommendations, which included:
- Recommendation 1: Where DLT-based infrastructure is used solely as part of a financial institution's internal books and records, then a CFTC registrant should be able to rely on its normal processes to assess information security and other relevant operational risks, whether those risks arise from the registrant’s own use of DLT-based infrastructure for its internal books and records or from the use of such infrastructure by a service provider, such as a custodian, for the service provider's internal books and records.
- Recommendation 2: Where a CFTC registrant looks to accept eligible non-cash collateral in tokenized form, it should be able to satisfy relevant requirements by applying its existing policies, procedures, and practices in the following areas: legal enforceability; segregation and custody arrangements; credit and custodial risk; and operational risk.
- Recommendation 3: Because use of DLT for these purposes need not affect the character of the relevant asset, and because registrants already have extensive policies, procedures, practices, and processes to address use of new technologies and infrastructures, no new rules or guidance should be necessary in order to permit such use.
Consistent with the President's Working Group report recommendations regarding collateral management (pages 52-53), the initiative seeks input on the CFTC’s use of its rulemaking, interpretative, and exemptive authority under the Commodity Exchange Act in areas such as eligibility of digital asset collateral, bundled trading and custody services, guidance to FCMs in calculating and administering segregation obligations, and clarity on haircuts on digital assets held by registered intermediaries (including FCMs, SDs, and DCOs) for purposes of calculating and reporting margin, financial resources/capital, segregation, and settlement obligations, including working with the Securities and Exchange Commission around the non-marketable securities haircut framework and its applicability to non-security digital assets.
Leadership and timing signals
Acting Chairman Pham has repeatedly encouraged engagement with digital asset and traditional market participants. Due to the recent departure of the agency’s lone Democratic Commissioner, Kristin Johnson, the Acting Chairman has a unilateral and unopposed authority to enact rulemakings, guidance, and otherwise implement the PWG Report.
Contact us to discuss opportunities to engage with the CFTC in this process.
1 See 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 See 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 CFTC Release Number 9109-25, Acting Chair Pham Announces Next Crypto Sprint Initiative (Aug. 21, 2025), available at https://www.cftc.gov/PressRoom/PressReleases/9109-25.
4 See, e.g., 17 CFR 23.156 "Forms of Margin", which sets forth eligible types of initial and variation margin to be exchanged by swap dealers and their counterparties to uncleared swap transactions. See also, 17 CFR 39.13(g), which sets forth requirements for initial margin eligibility.
5 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
