CFTC Approves Paxos Stablecoins and Other Regulated Issuers as Collateral in Futures Operations

The United States Commodity Futures Trading Commission (CFTC) has made a significant decision by expanding its digital asset regulations, allowing stablecoins issued by regulated institutions—including Paxos—to be used as collateral in futures trading by institutional traders. This change rectifies a previous restriction that inadequately excluded federally authorized banks, leveling the playing field for all regulated stablecoin issuers.

The New Regulation and Its Scope

The expansion of the regulatory framework marks an important milestone in integrating stablecoins into institutional derivatives markets. Previously, the CFTC’s guidance created a regulatory gap between different types of issuers. With this update, both traditional issuers and Paxos and Circle operate under the same standards, strengthening confidence in these digital tools as valid collateral instruments.

Paxos and Circle: Equal Conditions

The CFTC’s decision recognizes that Paxos, as a fiduciary service provider and stablecoin issuer, meets regulatory standards equivalent to other market participants. This opens new opportunities for financial institutions to use stablecoins from authorized issuers—such as Paxos—in their hedging and speculative derivatives operations without regulatory discrimination.

Strict Oversight and Compliance Protocols

The CFTC has linked this expansion to rigorous reporting and oversight requirements. Operators using stablecoins as collateral in derivatives must adhere to established transparency and compliance protocols, ensuring that the digital asset ecosystem remains under regulatory supervision. This measure guarantees that market growth occurs responsibly and in a controlled manner, protecting both participants and the integrity of the financial system.