CFTC Greenlights Stablecoins As Collateral For Derivatives

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The Commodity Futures Trading Commission (CFTC) has announced a new initiative that will enable the use of tokenized collateral, including Stablecoins, in the US derivatives market.

Acting Chairman Caroline D. Fam said the tokenized market is the future, highlighting stubcoin as a “killer app” for collateral management, adding that regulated stubcoin will reduce risk, reduce costs, unlock liquidity and enhance competitiveness.

“These market improvements will unleash US economic growth as market participants can move forward smarter and smarter,” she said, adding that the move is based on the agency’s “Crypto Sprint” initiative.

The initiative is part of the CFTC’s push to bring tokenized assets into traditional markets and to follow recommendations from the CFTC’s Global Market Advisory Committee. It also coincides with the President’s Working Group Report.

The CFTC also plans to use Stablecoins, such as Stablecoins, as collateral for regulated derivative transactions, and treat them like cash or the US Treasury Department.

This happened after the act of genius was signed into law in July, setting clear regulatory guidelines for Stablecoins.

Industry Leaders Back CFTC Stablecoin Initiative

Industry leaders such as Circle, Coinbase, Ripple, Tether, and Crypto.com praised the initiative. Jack McDonald of Ripple added that clear rules on custody, settlement and preparation will help you adopt Stubcoin with confidence.

Circle President Heath Tarbert said stubcoin will reduce costs, reduce risk and unlock global liquidity.

“Tokenized collateral and stubcoins can unlock the US derivatives market and stay ahead of global competition,” Coinbase’s legal officer Paul Grewal said in a post from X. @cftc Together, this initiative will modernize the market by increasing efficiency, reducing costs and increasing liquidity for all profits. ”

At the same time, SEC Chairman Paul Atkins said he hopes for an “innovation exemption” by the end of the year.

CFTC is considering a pilot program as a regulatory sandbox to support innovation while ensuring protection. Public comments about the initiative will be invited until October 20th, with submissions being made public to CFTC.Gov.

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