CFTC'S Tokenized Collateral Guidance: Integrating Blockchain Into Derivatives Markets

I. Introduction

On December 8, 2025, the staff of three divi sions of the Commodity Futures Trading Commis sion ("CFTC" or "Commission") issued joint guid ance outlining standards for the use of tokenized assets as collateral in futures and swaps trading.¹ This guidance, set forth in CFTC Letter No. 25-39 (the "Guidance"), takes a technology-neutral ap proach, clarifying that existing regulatory require ments applicable to non-cash collateral can accom modate tokenized assets without requiring new rulemaking. The Guidance directly impacts the regulatory framework applicable to futures com mission merchants ("FCMs"), derivatives clearing organizations ("DCOs"), and swap dealers ("Swap Dealers").²

Concurrent with the Guidance, the Commission launched a pilot program permitting bitcoin, Ether, and payment stablecoins to be used as margin col lateral by FCMs. Additionally, on December 11, 2025, the CFTC withdrew its 2020 interpretive guidance on when "actual delivery" occurs in retail digital asset transactions, determining that the prior guidance had become outdated following develop ments in digital asset spot and derivatives markets. Together, these developments represent a culmina tion of the CFTC's "Crypto Sprint" initiative and implement recommendations from the report of the President's Working Group on Digital Asset Markets.³ This article examines the Guidance in detail, analyzes its implications for market partici pants, and discusses the parallel digital asset pilot program.

II. Background and Regulatory Context

The Guidance emerges from several parallel CFTC initiatives. These include the Commission's September 2025 request for public comment on expanding the use of tokenized non-cash collat eral,⁴ which was part of the broader "Crypto Sprint" established by Acting Chairman Caroline Pham to implement the recommendations in the report of the President's Working Group on Digital Asset Markets.⁵

The Guidance builds directly upon the recom mendations of the November 2024 report of the CFTC's Global Markets Advisory Committee ("GMAC"), which recommended the expansion of non-cash collateral through the use of blockchain technology.⁶ The GMAC had noted that blockchain technology could address operational challenges that have historically impeded broader use of non cash collateral in derivatives markets.

The Guidance also follows the passage of the GENIUS Act,⁷ which created a comprehensive regulatory framework for payment stablecoins and is referenced in the Guidance as an important factor in the evolving regulatory landscape.

Notably, this Guidance was issued during the f inal days of Acting Chairman Pham's tenure at the CFTC.⁸ Chairman Michael Selig, who was con f irmed by the Senate on January 6, 2026, inherits a regulatory framework that Acting Chairman Pham had proposed to complete through technical amend ments to CFTC regulations for collateral, margin, clearing, settlement, reporting, and recordkeeping by August 2026.⁹ Given Chairman Selig's pro crypto and pro-innovation stance,¹⁰ continued momentumin this area appears likely. The Guidance reflects the broader Trump Administration's coordinated policy ef fort to advance digital asset trading in the United States.¹¹

III. The Tokenized Collateral Guidance

The Guidance takes a technology-neutral approach, clarifying that existing regulatory requirements applicable to non-cash collateral can accommodate tokenized assets without requiring new rulemaking. The Guidance empha sizes that the use of digital ledger technology (such as blockchain technology¹²) to tokenize an asset "need not change the fundamental characteristics of that asset."¹³ It acknowledges that different tokenization methods may provide different rights or levels of protection to token holders.¹⁴

In the context of futures, the integration of tokenized col lateral will require coordination among customers, FCMs, and DCOs. For swaps, it will primarily impact mandatory initial margin which is required to be held by third-party custodians, meaning that coordination between Swap Deal ers and third-party custodians will be required. The Guid ance can also potentially be applied to variation margin for trades between Swap Dealers and financial end-users¹⁵ and to initial margin voluntarily exchanged between swap counterparties. In both of these cases, there would be more f lexibility since a third-party custodian is not typically used.

The Guidance addresses five principal areas of regula tory concern: (i) eligible tokenized assets; (ii) legal enforce ability; (iii) segregation, custody, and control arrangements; (iv) haircuts and valuation; and (v) operational risks.¹⁶ The Guidance notes that these factors require an individual anal ysis of tokenized assets or tokenization structures in combi nation with regulatory requirements and applicable internal policies. This case-by-case individualized approach is con sistent with the CFTC's effort to establish a high-level technology neutral framework.

A. Eligible Tokenized Assets

The Guidance defines a "tokenized asset" as a digital rep resentation of a real-world asset—such as a U.S. Treasury or agency security, corporate bond, share in a money market fund, or equity security—that has been recorded on a blockchain as a digital token. The Guidance recognizes that tokenization permits digital ownership, fractional owner ship, and faster transfers.

Consistent with the GMAC recommendations, the Guid ance encourages market participants to focus tokenized col lateral efforts on assets already currently eligible to serve as regulatory margin. In this regard, the Guidance specifically references CFTC rules requiring DCOs to limit initial margin assets to those with minimal credit, market, and liquidity risks,¹⁷ and CFTC rules which specify non-cash assets that can be posted as margin for uncleared swaps.¹⁸

Importantly, the Guidance notes that none of the Com mission's regulations "require any particular technology or operational infrastructure" for transferring or holding eligible collateral.¹⁹ In other words, assets retain their margin eligibility so long as they satisfy applicable regula tory requirements, regardless of whether they are held in traditional or tokenized form.

B. Legal Enforceability

The Guidance emphasizes that registered entities and registrants must demonstrate that non-cash assets collected as regulatory margin meet legal enforceability requirements. The Guidance cites existing CFTC rules requiring DCOs to operate pursuant to a "well-founded, transparent, and en forceable legal framework" that addresses netting arrange ments, interests in collateral, and settlement finality.²⁰ Swap Dealers must ensure initial margin is held pursuant to a "legal, valid, binding, and enforceable custodial agreement."²¹ In some cases, tokenized assets can have characteristics that are different from the underlying tradi tional asset, making the legal analysis thereof an important area of focus for firms seeking to utilize tokenized collateral.

The Guidance encourages engagement with staff as mar ket participants and industry groups²² continue to develop best practices for analyzing tokenized collateral within exist ing legal frameworks. This is particularly relevant as states continue to adopt Article 12 of the Uniform Commercial Code, which addresses controllable electronic records including certain types of tokenized assets.²³

C. Segregation, Custody, and Control Arrangements

The Guidance reminds market participants that collateral held as margin by FCMs, DCOs, and Swap Dealers is subject to existing segregation and custody requirements²⁴ and must be held by eligible custodians.²⁵ These entities must maintain robust risk management programs addressing segregation, capital, liquidity, and settlement risks on an ongoing basis.

For FCMs,theGuidancehighlights existing requirements to maintain policies and procedures for assessing the liquid ity, marketability, and mark-to-market valuation of all secu rities or other non-cash assets held as segregated funds.26 Similarly, Swap Dealers must develop policies designed to address market and liquidity risks implicated by use of tokenized collateral.²⁷ The Guidance notes that these poli cies and procedures are subject to regular review and refinement. FCM and Swap Dealer risk management pro grams must be reviewed and tested at least annually or upon any material change in business that is reasonably likely to alter the entity's risk profile.²⁸ Notably, the Guidance does not resolve the tension between traditional control concepts and the technological reality that many digital assets are held through private keys that do not readily support shared or conditional control.²⁹ Market participants will need to carefully assess whether their custody and control arrange ments can credibly demonstrate that tokenized collateral has been properly delivered and held in a manner consistent with existing requirements. Market participants may look to emerging solutions such as multi-signature wallet arrange ments, smart contract-based escrow mechanisms, or hard ware security modules with programmable access controls to bridge this gap. The ongoing adoption of UCCArticle 12, which introduces a statutory framework for establishing "control" over controllable electronic records, may also provide helpful guidance, although adoption remains incom plete across U.S. jurisdictions.³⁰

D. Haircuts and Valuation

Akeypractical question for market participants is how to apply regulatory mandated haircuts to tokenized forms of eligible collateral. The Guidance provides that haircuts for tokenized assets "can utilize the same risk-based approach already applied to underlying assets" under existing Com mission regulations.³¹

This will require analysis of whether a tokenized form of an asset has a sufficiently similar risk profile to merit an equivalent haircut to that applied to the traditional form. The Guidance specifically refers to settlement time differ ences or differences in credit, market, or liquidity risk as potentially pertinent, all factors that may merit higher or lower haircuts than those applied to the corresponding traditional form of asset. Firms conducting this analysis will need to access internal or external experts with a deep understanding of the nature and functioning of tokenized assets.³²

The Guidance also addresses the additional liquidity resource requirements for DCOs, noting that qualifying liquidity resources must be "readily available and convert ible into cash pursuant to prearranged and highly reliable funding arrangements, even in extreme but plausible market conditions."³³

E. Operational Risks

The Guidance acknowledges that implementation of new technologies may implicate operational risks, including in formation security risks. As with the other items, the Guid ance notes that these are already addressed in existing risk management requirements applicable to FCMs, DCOs, and Swap Dealers.³⁴

The Guidance encourages FCMs, DCOs, and Swap Deal ers that intend to accept tokenized assets as collateral to carefully evaluate their operational readiness. This includes assessing whether they possess the requisite technical capabilities and expertise, implementing appropriate cyber security protections and access controls, and addressing potential network-wide threats and interoperability challenges.³⁵

IV. Digital Asset Pilot Program

Concurrent with the Guidance, the CFTC's Market Participants Division, in response to a request from Coinbase Financial Markets, Inc. ("CFM"), announced apilot program (the "Pilot Program") permitting FCMs to accept bitcoin (BTC), Ether (ETH), and payment stablecoins as margin collateral for derivatives positions.³⁶ This represents one of the most significant regulatory developments for digital as sets since the passage of the GENIUS Act. Although "pay ment stablecoin" is not defined by the CFTC's Market Participants Division, it is defined in CFM's request letter as any U.S. dollar payment stablecoin issued by a state regu lated money transmitter or trust company with reserve and reporting standards similar to those mandated by the GE NIUSAct until the GENIUSAct is effective, at which point it will be any permitted payment stablecoin issued under the GENIUSAct framework.

To rely on the Pilot Program, an FCM must first file a no tice of intent with the Market Participants Division specify ing when it will commence accepting digital assets as margin collateral. For the first three months following com mencement, the following conditions apply: (i) Acceptance is limited to BTC and ETH, valued at the haircut set by the applicable DCO, and payment stablecoins; (ii) Weekly reports must be filed with the CFTC detailing total digital assets held in each customer account class; and (iii) Prompt written notice must be given to the CFTC of any significant operational issues, system failures, or cybersecurity inci dents affecting use of digital asset margin collateral.³⁷

In connection with the Pilot Program, a 2020 CFTC ad visory that had restricted FCMs from accepting digital as sets as customer collateral was withdrawn.³⁸ The agency noted that the advisory had become outdated following ad vances in tokenization technology and the legal changes introduced by the GENIUSAct.

V. Looking Ahead

The Guidance acknowledges that both technological and regulatory developments remain ongoing and that it "may be updated as technological and regulatory developments on these topics continue to progress," consistent with the Commodity Exchange Act's stated purpose to "promote responsible innovation and fair competition."³⁹ The Pilot Program is framed as an interim placeholder for more per manent CFTC action at the commission-level.⁴⁰

The CFTC's Digital Assets Pilot Program occurs in the context of the SEC's articulation of a parallel framework for the use of digital and tokenized assets by SEC-regulated entities. On December 11, 2025, SEC staff issued no-action relief for DTCC's tokenization pilot, permitting DTC to is sue tokens representing security entitlements in assets held at DTC while preserving existing legal frameworks.⁴¹ On December 17, 2025, the SEC's Division of Trading and Markets issued a statement clarifying conditions under which broker-dealers may deem themselves in possession of customers'tokenized securities.⁴² These securities tokeniza tion developments are expected to run apace with the CFTC's tokenization initiatives.

VII. Conclusion

The CFTC's tokenized collateral guidance represents a significant step toward the integration of blockchain technol ogy into traditional derivatives markets. By confirming that existing regulatory frameworks can accommodate tokenized assets, the Guidance provides a pathway for market partici pants to leverage the operational efficiencies of tokeniza tion—including faster settlement times, fractional owner ship capabilities, and continuous trading—while maintaining the robust customer protections and risk man agement standards that underpin regulated derivatives markets.

For FCMs, DCOs, and Swap Dealers considering the use of tokenized collateral, the Guidance emphasizes the impor tance of individual analysis for each tokenized asset or structure. Market participants should review their existing policies and procedures to determine how tokenized collat eral can be integrated within current risk management frameworks and should engage with CFTCstaff where ques tions arise. For Swap Dealers, coordination with third-party initial margin custodians will be required. In some contexts, such as variation margin for trades between a Swap Dealer and a financial end-user, it may be possible to apply the Guidance with greater flexibility due to the usual absence of a third-party custodian.

The concurrent launch of the digital asset pilot program, permitting BTC, ETH, and payment stablecoins to be used as margin collateral, provides an immediate opportunity for FCMs to begin accepting digital assets within a structured regulatory framework. With the CFTC expected to continue its Crypto Sprint initiative, additional guidance and rulemak ing may be forthcoming.

Footnotes 

1 CFTC Letter No. 25-39, Re: Tokenized Collateral Guidance (Dec. 8, 2025), available at: https://www.cftc.gov /csl/25-39/download. It was jointly issued by the CFTC's Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk.

2 It technically also applies to major swap participants, a regulatory category with no current registrants.

3 President's Working Group on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology (July 30, 2025), available at: https://www.white house.gov/crypto/.

4 CFTC, Acting Chairman Pham Launches Tokenized Collateral and Stablecoins Initiative (Sept. 23, 2025), avail able at: https://www.cftc.gov/PressRoom/PressReleases/ 9130-25. 

5 CFTC, Acting Chairman Pham Announces CFTC Crypto Sprint (Aug. 1, 2025), available at: https://www.cftc. gov/PressRoom/PressReleases/9104-25. See also Pres ident's Working Group on DigitalAsset Markets, Strengthen ing American Leadership in Digital Financial Technology (July 30, 2025), available at: https://www.whitehouse.gov/c rypto/.

6 CFTC Global Markets Advisory Committee, Recom mendations to Expand Use of Non-Cash Collateral Through the Use of Distributed Ledger Technology (Nov. 21, 2024), available at: https://www.cftc.gov/media/11581/GMAC_D AM_UseofDLTasDerivativesCollateral_112124/download. The report has a slightly broader focus on "blockchain or other distributed technology." Id. at 2.

7 Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, 12 U.S.C.A. §§ 5901-5916. Al though the GENIUS Act was signed into law on July 18, 2025, it has a delayed operative effective date. The Act does not become effective until the earlier of 18 months after enactment (i.e., 18 January 2027) or 120 days after the implementing regulations are finalized. 

8 CFTC. Former Commissioners, https://www.cftc.gov/ About/Commissioners/FormerCommissioners/index.htm. 

9 Caroline D. Pham, Acting Chairman, CFTC, Keynote Address at FIA EXPO (Nov. 18, 2025), https://www.cftc.go v/PressRoom/SpeechesTestimony/opapham19.

10 CFTC, Chairman Selig Launches the CFTC Innova tion Advisory Committee (Jan. 12, 2026), https://www.cftc.g ov/PressRoom/PressReleases/9167-26 ("Innovators are harnessing technologies such as artificial intelligence, blockchain, and cloud computing to modernize legacy f inancial systems and build entirely new ones. Under my leadership, the Commission will develop fit-for-purpose market structure regulations for this new frontier of f inance.")

11 Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, 12 U.S.C.A. §§ 5901-5916.

12 Kristen E. Busch, Cong. Rsch. Serv., R47064, Blockchain: Novel Provenance Applications 4 (2022), avail able athttps://crsreports.congress.gov/product/pdf/R/R 47064: "[B]lockchain is one example of the larger category of distributed ledge technologies. . . ."

13 CFTC Letter No. 25-39 at 2.

14 Id.

15 17 CFR § 23.156(b)(1)(ii). 

16 CFTC Letter No. 25-39 at 2. 

17 17 CFR § 39.13(g).

18 17 CFR § 23.156.

19 CFTC Letter No. 25-39 at 3. 

20 CFTCLetter No. 25-39 at 3 (citing 17 CFR § 39.27(b) and 17 CFR § 39.13(g)(14)).

21 CFTC Letter No. 25-39 at 3; 17 CFR § 23.157(c)(2).

22 The International Swaps and Derivatives Association, for example, has commissioned legal opinions regarding the enforceability of ISDA agreement netting arrangements for over 90 jurisdictions. Int'l Swaps & Derivatives Ass'n, Opinions Overview, https://www.isda.org/opinions-overv iew/ (last visited Dec. 12, 2025).

23 U.C.C. art. 12.

24 See 17 CFR § 23.157(c) (for uncleared swap initial margin); see also 17 CFR §§ 1.20-30, 22.1-22.17, and 30.7 (segregation requirements for futures, foreign futures, and cleared swaps).

25 See, e.g., 17 CFR §§ 1.20(b), 22.4, 22.7, and 30.7(b) (permitted depositories).

26 17 CFR § 1.11(e)(3)(i)(J).

27 See 17 CFR § 23.600(c)(4)(i), (iii).

28 See 17 CFR § 1.11(f) (for FCMs) and 17 CFR § 23.600(e) (for Swap Dealers).

29 CFTC Letter No. 25-39 at 4-5

30 Unif. L. Comm'n, UCC, 2022Amendments to: Legis lative Bill Tracking, https://www.uniformlaws.org/committ ees/community-home?CommunityKey=1457c422-ddb7-40 b0-8c76-39a1991651ac (tracking state-by-state adoption).

31 CFTC Letter No. 25-39 at 5.

32 Id.

33 See 17 CFR § 39.33(c)(3). 

34 CFTC Letter No. 25-39 at 5.

35 CFTC Letter No. 25-39 at 5-6.

36 CFTC No-Action Letter No. 25-40, Staff No-Action Position Regarding Digital Assets Accepted as Margin Col lateral (Dec. 8, 2025), https://www.cftc.gov/csl/25-40/down load.

37 CFTC No-Action Letter No. 25-40 at 14.

38 CFTC Staff Advisory No. 20-34, Accepting Virtual Currencies from Customers into Segregation (Oct. 21, 2020) (withdrawn Dec. 8, 2025), https://www.cftc.gov/csl/20-34/d ownload.

39 CFTC Letter No. 25-39 at 6.

40 CFTC No-Action Letter No. 25-40 at 14.

41 The Depository Trust Company, SEC No-Action Let ter (Dec. 11, 2025), https://www.sec.gov/files/tm/no-action/ dtc-nal-121125.pdf.

42 Div. of Trading & Mkts., SEC, Statement on the Custody of Crypto Asset Securities by Broker-Dealers (Dec. 17, 2025),https://www.sec.gov/newsroom/speeches-statem ents/trading-markets-121725-statement-custody-crypto-ass et-securities-broker-dealers.

Originally published by Futures and Derivatives Law Report.

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