US Regulator Explains How Crypto Can Be Used as Trading Collateral

The US government just made it clearer how crypto companies can use digital money to back their trades — and it's a big deal for the industry.

The Commodity Futures Trading Commission (CFTC — a government agency that oversees trading markets) released new guidelines on Friday explaining exactly how trading firms can use cryptocurrencies like Bitcoin, Ethereum, and USDC as collateral (assets used to guarantee a trade, like putting down a deposit).

Here's what the new rules say:

• Bitcoin and Ethereum require a 20% "haircut" (meaning if you use $100 of Bitcoin as collateral, it only counts as $80) • Stablecoins (cryptocurrencies designed to maintain a steady value, usually $1) get a much smaller 2% haircut • These rules match what another regulator, the SEC, already requires — showing the government is coordinating

The guidelines are part of a pilot program (a test run) that started in December 2025. Before this, using crypto as collateral in traditional trading markets was much more complicated and uncertain.

Why does this matter? When traders can use their crypto holdings as collateral instead of converting to cash, it makes trading faster and cheaper. It's like being able to use your house as collateral for a loan without having to sell it first.

This move shows US regulators are slowly becoming more comfortable with cryptocurrencies in traditional financial markets, though they're still being cautious with strict rules and oversight.

This is an AI-generated summary. Read the original article at: https://www.theblock.co/post/394573/cftc-staff-details-how-crypto-firms-can-use-digital-assets-as-derivatives-collateral-in-new-faq?utm_source=rss&utm_medium=rss