The U.S. Commodity Futures Trading Commission (CFTC) has issued detailed guidance for a pilot program allowing the use of crypto assets as collateral. Under the program, futures brokers must notify the Market Participants Division before accepting crypto assets as margin. Key requirements include a 20% capital adequacy ratio for Bitcoin and Ethereum, and a 2% ratio for stablecoins. Initially, only Bitcoin, Ethereum, and stablecoins are accepted as collateral for the first three months.
Futures brokers must report major cybersecurity issues and provide weekly reports on crypto assets in client accounts. After three months, other crypto assets may be used as collateral, with some reporting requirements ending. The program restricts the use of crypto assets as collateral for unsettled swaps, but allows eligible tokenized assets as substitutes. Clearing institutions meeting CFTC's risk requirements can accept crypto assets and stablecoins as initial margin for cleared transactions.
CFTC Refines Crypto Collateral Rules for Pilot Program
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