According to Cointelegraph, the U.S. Commodity Futures Trading Commission (CFTC) may approve digital assets as trading collateral before the end of the year.
According to Bloomberg, a subcommittee of the CFTC’s Global Markets Advisory Committee recently voted to recommend allowing digital ledger technology (DLT)-based collateral for commodities and derivatives trading.
If the proposal is accepted by the CFTC, traders could use digital assets as collateral to settle trades as quickly and easily as other blockchain-based transactions.
Brokers can accept blockchain-tokenized assets, such as BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) tokens, through a market embed system.
Currently, blockchain assets are commonly used as collateral among large companies such as BlackRock and JP Morgan. The CFTC’s approval could boost mainstream adoption.
However, it is unclear what exactly the Global Markets Advisory Committee recommended, or what the proposal will look like. The main committee still needs to approve the subcommittee’s recommendations before they can be formally submitted to the CFTC for approval.
It remains to be seen whether the CFTC will approve the proposal or impose restrictions on participating institutions and blockchain.
As Cointelegraph reported, spot Bitcoin ETFs outperformed in September, with BlackRock’s Bitcoin ETF in particular performing best in the five-day inflow period on September 25.
This shows the growing popularity and potential value of digital assets in traditional financial markets, which may have an impact on the CFTC's decision.