CFTC staff clarify expectations for crypto used as collateral

The US Commodity Futures Trading Commission provided more detail on using crypto as collateral under a pilot program the agency launched last year. The Market Participants Division and the Division of Clearing and Risk answered frequently asked questions that followed two staff letters issued in December, which established the pilot allowing crypto to be used as margin in derivatives markets.

Futures commission merchants that want to take part must file a notice with the Market Participants Division that includes the date they will begin accepting crypto assets from customers as margin collateral. December guidance clarified what tokenized assets may be used as collateral, how to value them and how to calculate required amounts.

The CFTC said capital charges will be consistent with the SEC, recommending a 20% charge for Bitcoin and Ether positions and a 2% charge for stablecoins.

United States

cftc, crypto collateral, pilot program, market participants, tokenized assets, margin collateral, capital charges, bitcoin, ether, stablecoins