Coinbase CEO Brian Armstrong praises the recent move by CFTC to allow select digital assets to be used as collateral on U.S. derivatives markets, describing it as a “huge step in updating the financial system.”
The Commodity Futures Trading Commission (CFTC) has launched a pilot program allowing select digital assets, including BTC, ETH, USD Coin (USDC) or other payment stablecoins to be used as collateral on U.S. derivatives markets.
Announced by Acting Chairman Caroline Pham, the program is part of a broader push to provide clear rules for market participants using tokenized collateral, including tokenized versions of real-world assets like U.S. Treasuries.
The CFTC started working to allow stablecoins to be used as collateral for certain products earlier this year.
Crypto utility unlocked
CFTC has also issued a no-action letter giving FCMs limited permission to hold certain digital assets in segregated customer accounts, provided they manage risks carefully.
The agency has withdrawn older guidance from 2020 that had in prior times prevented the use of crypto as collateral in many cases. That advisory is now taken to be outdated, in light of the GENIUS Act, which updated federal rules around digital assets, including stablecoins.
Coinbase Chief Legal Officer Paul Grewal praised the move. “Today’s no-action relief from CFTC unlocks the use of digital assets as collateral in derivatives markets. Staff Advisory 20-34 was a concrete ceiling on innovation. It relied on outdated info, went well beyond the bounds of regulation and frustrated the goals of the PWG. for your vision and leadership,” Grewal wrote in a tweet.
In a major milestone for institutional crypto adoption, Coinbase’s Crypto-as-a-Service platform is now powering PNC Bank’s launch of direct Bitcoin trading for PNC Private Bank clients, the first to market with such an offering among the major U.S. banks.
