Crypto Clarity: CFTC FAQs Clarify Use of Crypto Assets by Registrants and Registered Entities – Part 2

The CFTC’s Market Participants Division (MPD) and Division of Clearing and Risk (DCR) jointly issued on March 20, 2026 responses to 11 frequently asked questions addressing how futures commission merchants, derivatives clearing organizations, and swap dealers may use crypto assets and blockchain technologies under existing CFTC regulations and recent staff guidance.

The FAQs supplement prior staff guidance issued in December 2025: CFTC Staff Letter 25-39 on Tokenized Collateral Guidance and CFTC Staff Letter 26-05 (successor to CFTC Staff Letter 25-40) providing a no-action position permitting futures commission merchants (FCMs) to accept certain crypto assets (payment stablecoins, bitcoin, and ether) as collateral for margin.

The FAQs reflect the CFTC’s commitment to Project Crypto, the interagency harmonization initiative with the US Securities and Exchange Commission, and provide a clear operational roadmap for regulated entities seeking to engage with digital assets in derivatives markets.

This LawFlash is the second installment in a series to provide our insights into the far-reaching implications of the CFTC’s and SEC’s Project Crypto. See our March 25 LawFlash for part 1 on SEC’s long-awaited interpretative guidance on how federal securities laws apply to crypto assets and related transactions.

KEY TAKEAWAYS

• FCMs relying on Staff Letter 26-05 may apply the value of a customer’s nonsecurity crypto assets, after applicable haircuts, to cover customer debit or deficit account balances in futures, foreign futures, and cleared swaps accounts, consistent with an FCM’s ability to assign margin value to crypto assets.
• FCMs may deposit proprietary payment stablecoins as residual interest in customer segregated accounts, subject to a minimum 2% capital charge on market value, but may not use proprietary non-stablecoin crypto assets (e.g., bitcoin or ether) for this purpose.
• FCMs may not invest customer funds in payment stablecoins; the permitted investment list under Regulation 1.25 is unchanged.
• Crypto assets, including payment stablecoins, are not eligible margin collateral for uncleared swaps; tokenized versions of otherwise eligible collateral may qualify if they confer equivalent legal and economic rights.
• Capital charges for FCM proprietary positions in bitcoin and ether are set at a minimum of 20% under Regulation 1.17(c)(5)(ii) and a 2% capital charge applies for payment stablecoins, expressly aligning with SEC standards for broker-dealers.
• Derivatives clearing organizations (DCOs) may accept crypto assets, including payment stablecoins, as initial margin for cleared transactions if they meet Regulation 39.13(g)(10)’s “minimal credit, market, and liquidity risk” standards, with haircuts reviewed at least monthly.
• FCMs must file electronic notice with MPD before relying on Staff Letter 26-05, and are subject to a tiered compliance regimen including restricted permissible asset types, incident reporting, and weekly position reports during an initial three-month period.

BACKGROUND

The FAQs arrive amidst a rapidly evolving regulatory environment for digital assets within the CFTC’s jurisdictional markets. In December 2025, MPD and DCR published Staff Letter 25-39 and a letter that was recently reissued as Staff Letter 26-05[1] to provide guidance on the use of tokenized assets as collateral and a no-action position permitting FCMs to accept certain crypto assets as margin collateral, respectively.

Those letters were part of the CFTC’s broader “Crypto Sprint” initiative,[2] which included new guidance and digital asset spot trading, withdrawal of previous virtual currency advisories, and a pilot program for the use of bitcoin, ether, and payment stablecoin as derivatives collateral. The FAQs further complement a formal interagency harmonization program launched in January 2026, which has thus far largely focused on providing guidance in respect of crypto asset activities and distributed ledger technology.[3]

In particular, the FAQs’ alignment of capital haircut rates with the SEC’s broker-dealer guidance is a significant development for market participants.

FCM TREATMENT OF CUSTOMER CRYPTO ASSETS

The FAQs address how FCMs may handle customer-deposited crypto assets:

Debit and deficit balances. An FCM relying on Staff Letter 26-05 may apply the post-haircut value of a customer’s nonsecurity crypto assets, including payment stablecoins, held as margin to secure that customer’s debit or deficit account balance. This clarifies that the no-action position in Staff Letter 26-05, which addressed the application of crypto asset value to margin sufficiency determinations for purposes of Regulations 22.2(f)(5) and 30.7, extends to the treatment of debit balances under Regulation 1.17(c)(5)(viii)(C).

Residual interest and payment stablecoins. An FCM may deposit proprietary payment stablecoins into customer segregated accounts as residual interest, subject to a capital charge of at least 2% of market value. The FAQs note that this treatment is consistent with the SEC’s parallel approach to broker-dealer proprietary positions in payment stablecoins.[4]

Residual interest and non-stablecoin crypto assets. An FCM may not use proprietary non-stablecoin crypto assets (e.g., bitcoin and ether) as residual interest in customer segregated accounts. The no-action position in Staff Letter 26-05 permits only payment stablecoins for this purpose.

Investment of customer funds. Staff Letter 26-05 does not expand the list of permitted investments for customer funds under Regulation 1.25. Payment stablecoins may enter segregated accounts only as the FCM’s residual interest, not as an investment of customer funds.

SWAP DEALER MARGIN FOR UNCLEARED SWAPS

The eligible collateral list under Regulation 23.156 is not affected by Staff Letter 26-05, therefore a swap dealer may not use crypto assets, including payment stablecoins, as initial or variation margin for uncleared swaps with another swap dealer or a financial end user.

But, consistent with the tokenized collateral guidance in Staff Letter 25-39, a swap dealer may exchange a tokenized form of an otherwise eligible collateral asset, provided that the tokenized version confers the same legal and economic rights as the traditional form of the asset.

CAPITAL CHARGES FOR FCM PROPRIETARY POSITIONS

The FAQs set out specific capital charge rates for FCMs holding proprietary nonsecurity crypto assets. FCMs may apply (1) a minimum 20% capital charge for inventory positions in bitcoin and ether, consistent with the charge applicable to commodities under Regulation 1.17(c)(5)(ii), and (2) a 2% capital charge for payment stablecoins.

Both rates expressly mirror those articulated in the SEC’s FAQ for broker-dealers.[5] MPD and DCR framed this alignment as reflecting “the spirit of inter-agency harmonization,” supporting the objectives of Project Crypto.

DCO ACCEPTANCE OF CRYPTO ASSETS AS INITIAL MARGIN

DCOs may accept crypto assets, including payment stablecoins, as initial margin for cleared transactions, provided that the assets meet the minimal credit, market, and liquidity risk requirements of Regulation 39.13(g)(10). DCOs bear the responsibility for setting appropriate haircuts, reviewed under stressed market conditions on at least a monthly basis pursuant to Regulation 39.13(g)(12).

In contrast to the specific rates prescribed for FCMs, the FAQs do not prescribe specific haircut percentages for DCOs, leaving that determination to each DCO’s risk management framework, consistent with the CFTC’s approach taken in Staff Letter 26-05.

FCM COMPLIANCE PROCEDURES UNDER STAFF LETTER 26-05

The FAQs also provide more clarity on the procedural requirements for FCMs that seek to rely on the no-action position in Staff Letter 26-05.

Pre-reliance notice. Before an FCM may commence accepting crypto assets as margin collateral, it must file an electronic notice with MPD specifying the date on which it will begin accepting such assets.

Initial three-month conditions. During the three-month period commencing on the date the FCM first accepts customer crypto assets, the following conditions apply:

• Permissible asset types are limited to payment stablecoins, bitcoin, and ether. No other crypto assets may be accepted as margin collateral or deposited as proprietary residual interest.
• Prompt written notice is required for any “significant” operational or system issue, disruption, cybersecurity incident, or failure affecting the use of crypto assets as customer margin collateral.
• Beginning with the calendar month following the month of the pre-reliance notice filing, weekly reports of total crypto assets held in each of the futures, foreign futures, and cleared swaps customer accounts must be filed, broken out by asset type (including payment stablecoins).

Post-initial period. After the three-month initial period expires, the conditions limiting acceptable crypto asset margin collateral types to payment stablecoin, bitcoin, and ether, as well as the condition requiring incident-reporting for significant operational or system issues, will no longer apply.

LOOKING AHEAD

The FAQs represent an important, albeit incremental, step in the CFTC’s development of a regulatory framework for digital assets in the derivatives markets.

By addressing how existing rules apply to crypto asset collateral rather than promulgating sweeping new requirements, the CFTC is adhering to what Chairman Selig has described as a “minimum effective dose” approach to regulation,[6] focused on providing clarity within existing structures while more comprehensive market infrastructure regulation is pending in Congress.

The explicit alignment of capital haircut treatment with the SEC’s framework for broker-dealers is a tangible deliverable of Project Crypto, and the industry should expect further harmonization efforts and more formal rulemaking on the usage of digital assets as collateral.

Staff Letter 26-05 states that it “will no longer apply” once the CFTC finalizes formal rules on digital asset collateral, including any implementing actions under the Guiding and Establishing National Innovation in US Stablecoins Act (GENIUS Act).[7] FCMs, DCOs, and swap dealers should monitor these developments closely and assess their preparedness to comply with any permanent rules when finalized.

The CFTC also has indicated it will update the FAQs from time to time. Firms operating in this space should treat the FAQs as a living resource and track new and updated questions as part of their ongoing compliance monitoring.