CFTC Could Accept Digital Assets as Trading Collateral

The United States Commodity Futures Trading Commission (CFTC) may soon approve the use of digital assets as trading collateral.

A subcommittee of the CFTC’s Global Markets Advisory Committee has recommended a proposal to allow digital ledger technology-based collateral in commodities and derivatives trading.

If accepted, this would allow traders to settle transactions using digital assets as collateral, similar to transactions using digital ledger and blockchain technology.

Under this proposal, brokers could accept blockchain-based tokenized assets, such as BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), through market-embedded systems.

While the use of blockchain-based collateral in trading is already common among large firms like BlackRock and JP Morgan, the CFTC’s general approval could pave the way for widespread adoption.