The Commodity Futures Trading Commission (CFTC) has recommended expanding the use of non-cash collateral via distributed ledger technology (DLT) through its Global Markets Advisory Committee (GMAC).
The CFTC stated that this recommendation establishes a legal and regulatory framework for market participants to apply their existing policies and procedures to support the use of DLT for non-cash collateral while remaining compliant with margin requirements.
CFTC Commissioner Caroline D. Pham remarked, “Globally, there have been successful and proven commercial use cases for tokenization of assets, including digital government bond issuances in Europe and Asia, and over $1.5 trillion in institutional repo and payments transactions conducted on enterprise blockchain platforms, leading to more efficient collateral and treasury management.
“Today’s GMAC recommendation on tokenized non-cash collateral is a pivotal step toward achieving regulatory clarity for digital assets in the U.S. This development opens doors for our derivatives markets while ensuring the same guardrails and protections remain. Embracing new technology does not require us to compromise on market integrity.”