The United States Opens a New Era in Crypto: CFTC Approves BTC, ETH, and USDC as Collateral in the Derivatives Market

The U.S. Commodity Futures Trading Commission (CFTC)'s decision is not an isolated event. Following last week’s approval of spot cryptocurrencies being traded on regulated exchanges, this pilot is a continuation of the “crypto sprint” initiative, aiming to implement the recommendations of the President’s Working Group on Financial Markets for digital assets.

This regulatory breakthrough comes after the passage of the “Genius Act,” which updated federal regulations, leading the CFTC to rescind its 2020 guidance that restricted the use of crypto assets as collateral.

01 Regulatory Milestone

On December 8, 2025, the U.S. Commodity Futures Trading Commission announced a historic policy change. Acting Chair Caroline D. Pham officially announced the launch of the “Digital Asset Pilot Program,” an initiative that will allow certain digital assets to be used as collateral in derivatives markets.

The core of the plan is to allow futures commission merchants to accept digital assets, including Bitcoin, Ethereum, and USDC, as customer margin. This decision is based on the implementation of the Genius Act and marks a significant milestone for the use of digital assets in regulated markets.

In her statement, Acting Chair Pham clearly stated: “The American public deserves safe, domestic markets as an alternative to offshore platforms.”

This statement directly responds to recent customer loss incidents at non-U.S. crypto exchanges. She emphasized that this move will provide market participants with safer and more efficient capital utilization channels.

02 How the Pilot Program Works

The pilot program has a clear framework and restrictions. During the first three months, the collateral that futures commission merchants can accept will be limited to Bitcoin, Ethereum, and USDC.

All participating futures commission merchants must comply with strict reporting requirements: they must report the total amount of digital assets held in customer accounts to the CFTC weekly, broken down by asset type and customer account category.

These firms must also promptly report to CFTC staff any significant issues affecting the use of digital assets as customer margin collateral. These frequent reporting and notification requirements are designed to allow regulators to closely monitor progress.

Collateral in the crypto world refers to assets pledged by users to secure loans or positions, acting as a safety net for lenders or trading platforms. If users fail to repay what they owe, the collateral will be forfeited to cover the loss.

03 Shift in Regulatory Framework

In addition to the pilot program, the CFTC also issued new guidelines on tokenized collateral. These guidelines emphasize that the CFTC’s regulatory rules are “technology neutral” and encourage case-by-case analysis of tokenized assets under the existing regulatory framework.

Meanwhile, the CFTC’s Division of Market Participants issued a no-action position for futures commission merchants accepting non-security digital assets, including payment stablecoins, as customer margin collateral. This document provides regulatory clarity on the application of segregation and capital requirements for market participants.

The CFTC officially rescinded “Staff Advisory 20-34,” a document that had restricted the way virtual currencies were held in customer accounts since 2020. The agency stated that the development of digital markets and the passage of the Genius Act have rendered this advisory outdated.

04 Positive Industry Response

The crypto industry has responded enthusiastically to this decision. Coinbase Chief Legal Officer Paul Grewal stated: “The CFTC’s decision validates what the crypto industry has long believed: stablecoins and digital assets can make payments faster, cheaper, and reduce risk.”

Circle President Heath Tarbert pointed out: “Deploying prudently regulated payment stablecoins in CFTC-regulated markets protects customers, reduces settlement friction, and supports round-the-clock risk hedging.”

Ripple’s SVP of Stablecoins Jack McDonald added that the CFTC’s action provides the regulatory clarity needed for digital assets to be integrated into regulated derivatives markets, unlocking greater capital efficiency.

05 The Trend of Financial System Integration

The CFTC’s decision is not unique. In October this year, JPMorgan planned to allow institutional clients to use their Bitcoin and Ether holdings as collateral for loans by the end of the year—marking a significant leap forward for Wall Street’s integration into the crypto space.

This expansion indicates that crypto assets are being incorporated into the core architecture of the financial system at an unprecedented pace. As the regulatory landscape evolves, major banks are beginning to integrate digital assets more deeply into their lending systems.

Gate, as an industry-leading trading platform, has long supported multiple assets as margin collateral for trading, providing users with clear instructions and risk parameters. Such industry practices provide a practical foundation for the evolution of regulatory policy.

By allowing borrowing or trading without selling assets, collateral helps traders open larger positions than their balances and establishes trust in systems where parties are typically unknown to each other.

06 Market Impact and Outlook

The implementation of this pilot program could have far-reaching effects on the crypto market. With digital assets officially incorporated into regulated derivatives markets, the entry threshold for institutional participants is significantly lowered.

Capital efficiency will be improved, as traders can use their crypto holdings as collateral without converting them into fiat or other traditional assets. This means more liquidity may flow into the crypto market.

Regulatory clarity paves the way for financial innovation. The CFTC framework applies not only to purely digital assets like Bitcoin and Ethereum, but also to tokenized real-world assets such as U.S. Treasuries and money market funds.

Industry experts predict that this move will encourage more traditional financial institutions to explore digital asset-related services. In fact, several institutions—including State Street, BNY Mellon, and Fidelity—already offer crypto custody and related services.

Future Outlook

In the first phase of the pilot program, the CFTC’s desks will be piled high each week with digital asset holding reports submitted by futures commission merchants. These data will form the first-hand information for U.S. regulators to understand the risks of crypto collateral.

Meanwhile, JPMorgan bankers are adjusting their loan agreement templates ahead of year-end, preparing to include Bitcoin and Ethereum as acceptable collateral options.

Circle’s engineers are focused on optimizing the stablecoin settlement system to ensure near real-time margin settlement runs smoothly. This series of seemingly independent actions is converging into an irreversible trend driving the integration of traditional finance and the crypto world.