Interpreting the Real Turning Point in Crypto Regulation: BTC, ETH, and USDC Access the US Derivatives Market

Written by: Asher (@Asher_0210), Mars Finance

This morning, Caroline D. Pham, Acting Chair of the U.S. Commodity Futures Trading Commission (CFTC), announced the launch of the Digital Asset Margin Pilot Program. This initiative allows digital assets such as BTC, ETH, and USDC to be used as compliant collateral on regulated derivatives markets in the United States. The CFTC also issued regulatory guidance on tokenized collateral and repealed outdated rules rendered obsolete by the enactment of the “GENIUS Act.” Additionally, Caroline D. Pham stated: “As I have said before, responsible innovation ensures that U.S. markets remain world leaders and drives economic growth, as market participants can safely deploy capital to achieve greater investment returns.”

Digital assets formally enter the derivatives market as compliant collateral

The CFTC’s newly launched Digital Asset Margin Pilot Program is essentially a proactive regulatory “green light” from U.S. authorities. Previously, only traditional assets such as cash, government bonds, and commercial paper could serve as collateral in U.S. regulated derivatives markets, with digital assets excluded. The launch of this pilot means, for the first time, regulators are explicitly recognizing digital assets as eligible collateral for mainstream financial transactions. Key details of the program are as follows:

Eligible Participants: Futures Commission Merchants (FCMs)

The pilot is aimed at licensed FCMs, who are core participants in the derivatives market, responsible for client fund custody, margin management, and clearing channels.

Permitted Assets: BTC, ETH, USDC

During the initial three-month period, FCMs may accept digital asset collateral limited to BTC, ETH, and USDC, with holdings reported to the CFTC on a weekly, per-account basis. Regulators have clearly stated that this approach adheres to the principle of “technological neutrality,” focusing on risk attributes rather than asset labels.

Stringent Regulatory Requirements

To ensure the stability of the traditional financial system, the CFTC has specified highly prudent requirements, including:

• Digital assets must be held in segregated accounts and cannot be commingled with institutional funds.
• FCMs must report weekly to the CFTC on position changes.
• Major issues must be reported immediately.
• The CFTC will apply the most conservative haircut rates to digital assets to hedge against price volatility.

In other words, the regulator is not simply opening the door, but is establishing a controllable, auditable, and traceable framework.

Repeal of Old Rules and New Guidance

With the launch of the digital asset collateral pilot, the CFTC announced the repeal of Notice 20-34 from 2020—an outdated rule made irrelevant by the passage of the GENIUS Act. The CFTC also issued new regulatory guidelines for “tokenized collateral,” laying the institutional groundwork for on-chain tokenization of traditional assets such as treasury bonds and funds.

Regulatory Shift: Offering “No-Action Relief”

For FCMs wishing to pilot digital asset margin, the CFTC has provided “No-Action Relief,” offering regulatory clarity and requiring robust risk controls. This is equivalent to the CFTC telling institutions: “Operate within the framework, and you will not face additional enforcement risk.” For traditional institutions looking to enter crypto, this serves as a crucial reassurance.

Industry Leader Perspectives

Coinbase: Affirming Industry Consensus, Driving Payment Revolution

Coinbase Chief Legal Officer Paul Grewal posted on X, stating: “The CFTC’s digital asset margin pilot affirms the crypto industry’s long-held consensus: stablecoins and digital assets enable faster, cheaper, and less risky payments.” Grewal notes that the pilot aligns with Congressional intent behind the GENIUS Act, paving the way for stablecoins to become key settlement tools and enabling faster, lower-cost cross-border payments. Chief Policy Officer Faryar Shirzad added that the move will significantly enhance the utility of digital assets, attracting more institutional investors to regulated markets. At the same time, the potential of stablecoins as settlement tools will be fully unlocked, promising faster, lower-cost cross-border payments.

Crypto.com: Ushering in 24/7 Trading in the U.S., a Milestone for Crypto’s Mainstream Adoption

Crypto.com CEO Kris Marszalek posted on X: “This announcement makes true 24/7 trading a reality in the U.S. and drives deep fusion between crypto and mainstream finance.” He emphasized that using tokenized collateral will reduce settlement friction, enhance liquidity, and set a global benchmark, making this not just a technological leap but also a regulatory “green light” for innovation.

Circle: Reducing Settlement Risk, Embracing Real-Time Clearing

Circle President Heath Tarbert commented: “This is a ‘breakout moment’ for crypto markets, letting institutions manage risk efficiently while maintaining asset exposure. These changes will significantly reduce settlement risk and friction in derivatives trading by enabling near real-time margin settlement.” Tarbert also highlighted that USDC’s eligibility as collateral further cements stablecoins’ core role in traditional finance.

Ripple: Unlocking Capital Efficiency, U.S. Regains Leadership

Ripple responded by stating this pilot “finally delivers the long-awaited capital efficiency unlock for institutions,” reinforcing U.S. global leadership at a critical moment. The statement noted that allowing BTC, ETH, and USDC to serve directly as collateral reduces the friction of converting crypto to cash, enabling trillions in capital to flow into regulated derivatives markets—signaling a strategic shift from “offshore uncertainty” to “domestic compliance.”

In summary, although the Digital Asset Margin Pilot Program is a short-term test (three months), its strict reporting and risk control mechanisms (e.g., weekly position disclosures, maximum haircuts) ensure a safe foundation while paving the way for future expansion. The short-term impact on retail investors is limited, but in the long term, this is a significant signal of institutional recognition.

The Real Turning Point in U.S. Crypto Regulation

The CFTC’s pilot is not only about BTC, ETH, and USDC being used as compliant margin; it marks the first time digital assets are entering the core of the U.S. financial system in an institutionalized manner. Futures and swaps markets are the world’s most important capital centers—when crypto assets can be pledged and used here, they leap from “speculative assets” to regulated financial tools, providing institutional investors with a clear compliance path and improving market liquidity and capital efficiency.

The inclusion of stablecoin USDC is especially symbolic: it is officially recognized as a digital dollar for financial transactions, reinforcing the dollar’s central position in on-chain payments and settlement, and paving the way for stablecoins as key financial infrastructure. This shift signals that U.S. regulators are moving from “restriction” to “institutionalized guidance,” providing a clear framework for tokenized finance—including custody, segregation, valuation, and risk management—laying the foundation for future on-chain tokenization of treasuries, funds, and money market instruments.

In the short term, the pilot has limited impact on retail investors, with stringent reporting and risk management ensuring market safety. In the longer term, it’s a crucial signal of institutional recognition, meaning more capital will enter the crypto market via regulated channels, stablecoin settlement functions will be fully realized, and derivatives liquidity and market efficiency will likely improve significantly. More importantly, this pilot reflects a structural shift in U.S. regulation: crypto assets are no longer just speculative objects, but institutionalized assets that can be integrated into the mainstream financial system.

If crypto ETFs mean “crypto assets have become assets,” then the CFTC’s digital asset margin pilot marks that “crypto assets have formally entered the U.S. financial system.” More assets will be tokenized in the future, institutions will use on-chain assets as collateral, and the dollar will circulate on-chain via stablecoins. This is not just a short-term policy—it signals a new cycle of deep integration between crypto and mainstream finance.