CFTC Publishes Guidelines for Crypto Collateral in Derivatives Markets

The US Commodity Futures Trading Commission (CFTC) has introduced new guidelines for the use of cryptocurrency as collateral in derivatives markets. The regulatory body has published a set of frequently asked questions (FAQs) outlining the operational requirements for participating firms to accept crypto assets as margin.

According to the document, futures commission merchants wishing to join the pilot program must file a notice through the CFTC's electronic filing system before accepting any cryptocurrency from customers as margin. The notice must include the date on which the firm will begin accepting crypto assets, and weekly reports on total crypto holdings across all customer account types are also required during the initial phase.

The rules also specify that firms can only accept Bitcoin, Ethereum, and payment stablecoins as collateral for the first three months of participation. After this period, restrictions are lifted, and firms may expand to other crypto assets while the weekly reporting requirement ends.