CFTC Launches Digital Asset Pilot to Use Bitcoin as Collateral in the Derivatives Market

In a December market update drawn from COINOTAG and The Block, the CFTC announced a Digital Asset Pilot Program led by Acting Chair Caroline Pham. The initiative allows a select set of crypto assets to serve as collateral within the derivatives market, with an initial scope limited to Bitcoin, Ethereum, and USDC.

This effort extends a broader September push to expand tokenized collateral in derivatives, particularly through stablecoins, as part of enhanced risk management and liquidity strategies. The pilot emphasizes prudential standards for custody, valuation, and dispute resolution, while maintaining strict regulatory oversight.

Market participants should monitor governance updates and clarity on eligibility criteria, as the program could influence collateral pricing and margin requirements across crypto-linked derivatives.