The adoption of blockchain-native assets like the USDC stablecoin and tokenized treasuries such as BlackRock’s BUIDL is gaining momentum in the crypto derivatives market. These assets are being embraced by trading platforms to enhance collateral efficiency and offer a blend of stability, yield, and compliance, making them attractive to institutional players seeking capital optimization.
Coinbase Derivatives recently announced that USDC will be accepted as collateral for margined futures, pending regulatory approval from the CFTC. This move marks the first time USDC will be used as collateral in US futures markets, with Coinbase working closely with the CFTC to make it happen. The integration of USDC as collateral will rely on Coinbase Custody Trust, a Qualified Custodian regulated by the New York Department of Financial Services.
In a similar development, tokenized treasuries are also gaining traction in the derivatives market. Securitize, a digital asset firm, announced that BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) can now be used as collateral on platforms like Crypto.com and Deribit. BUIDL represents a short-term yield-bearing fund backed by cash and US Treasuries, managing $2.9 billion in assets. By accepting BUIDL as margin, institutional traders can earn yield on their capital while leveraging their positions.
These recent developments signify a shift towards more capital-efficient and transparent market structures. Assets like USDC offer near-instant settlement and have broad acceptance across centralized and decentralized platforms. Carlos Domingo, Co-Founder and CEO of Securitize, highlighted the use of tokenized treasuries to improve capital efficiency and risk management while still offering yield.
These moves follow a recommendation from CFTC Acting Chairman Caroline D. Pham in November 2024, urging firms to explore the use of distributed ledger technology for non-cash collateral. Embracing these new technologies would not compromise market integrity, as there have been successful commercial use cases for asset tokenization in various sectors.
Overall, the adoption of USDC and tokenized treasuries in the crypto derivatives market underscores a growing trend towards more efficient and transparent trading practices. These assets provide institutional players with opportunities to optimize their capital while ensuring compliance and security in their transactions.