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CFTC Explores Stablecoins Collateral Initiative in US Derivatives Market

CFTC Explores Stablecoins Collateral Initiative in US Derivatives Market

Crypto firms say the CFTC’s plan to allow stablecoins as collateral could modernise markets, boost global liquidity.

Written by Rahul Dhingra, Edited by David Delima | Updated: 24 September 2025 18:21 IST

CFTC Explores Stablecoins Collateral Initiative in US Derivatives Market

Photo Credit: Unsplash/CoinWire Japan

Crypto leaders say using stablecoins as collateral could cut costs and reduce risks.

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Highlights

CFTC seeks input on stablecoins as collateral until October 20
Circle, Coinbase back plan, citing efficiency and liquidity
US SEC also explores exemptions to ease digital asset regulation

The US Commodity Futures Trading Commission (CFTC) has unveiled plans to allow stablecoins and tokenised assets to be used as collateral in regulated derivatives markets. Acting chair Caroline Pham announced the initiative this week, saying the agency would work with industry participants and has opened public feedback until October 20. Extensively used stablecoins such as USD Coin (USDC) and Tether (USDT) might be treated similarly to cash or US Treasuries in derivatives trading if the move is put into effect.

Industry Sees Move as Key Step Toward Greater Efficiency and Trust

Crypto companies and executives have expressed strong support for this proposal. Circle president Heath Tarbert said the initiative, aligned with the recently passed GENIUS Act, will help create a system where payment stablecoins issued by licensed American companies can serve as collateral in derivatives and other financial markets. He also said that using trusted stablecoins as collateral would lower costs, reduce risks, and unlock liquidity around the clock across global markets.

.@CFTCpham Launches Tokenized Collateral and Stablecoins Initiative: https://t.co/6juQp6PhdI
— CFTC (@CFTC) September 23, 2025

Coinbase chief legal officer Paul Grewal also praised the announcement, saying tokenised collateral could modernise markets, increase efficiency, and put the US ahead of international competition.

Tokenized collateral and stablecoins can unlock US derivatives markets and put us ahead of global competition. Really exciting to see @CFTC put together this initiative to modernize the market by increasing efficiency, reducing costs, and upping liquidity to the benefit of all. https://t.co/bhMuQ7MauN
— paulgrewal.eth (@iampaulgrewal) September 23, 2025

This proposal builds on the CFTC's previous consultations on digital assets, such as its Crypto CEO Forum and the Global Markets Advisory Committee's suggestions for using distributed ledger technology to increase the amount of non-cash collateral.

Pham described collateral management as the “killer app” for stablecoins and emphasised that tokenised markets represent the future of financial services. The programme also happens to be a part of the government's wider “crypto sprint” strategy to align regulation with technological innovation.

CRYPTO SPRINT: @CFTC launches tokenized collateral and stablecoins initiative with industry partners. It's the killer app to modernize markets and make dollars work smarter and go further, unleashing U.S. economic growth by lowering costs 🇺🇸 @circle @coinbase @cryptocom… pic.twitter.com/VLCeGNS6K5
— Caroline D. Pham (@CarolineDPham) September 23, 2025

The regulatory landscape for digital assets in the US is undergoing rapid change. Similar to Pham's remarks, US Securities and Exchange Commission (SEC) chair Paul Atkins revealed that the regulator is exploring an “innovation exemption” to give crypto firms temporary relief from existing securities rules. All of these changes point to a possible change in the way that stablecoins and digital assets are regulated in conventional financial markets.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: CFTC, Cryptocurrency, stablecoins, Collateral

Rahul Dhingra

Email Rahul Dhingra

Rahul Dhingra is a crypto writer at Gadgets 360, where he covers the exciting world of Cryptocurrency, Blockchain, Defi and Web3. Before joining Gadgets 360, he worked as a content specialist for a European-based Crypto Exchange. Rahul loves storytelling, not just through the written word but also through the visual medium. Beyond his professional life, Rahul is a sports fanatic. Whether it’s cricket or football, his passion for the game is contagious. More