The U.S. Commodity Futures Trading Commission on September 25, 2026, issued guidance permitting futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) to invest customer funds in tokenized versions of already-permitted assets under Regulation 1.25. The guidance also all...
"With developments like tokenization, onchain finance, and 24/7 trading, the next decade will likely bring more change to financial markets than the previous several decades combined." — Michael Selig, Chairman, U.S. Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission on September 25, 2026, issued guidance permitting futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) to invest customer funds in tokenized versions of already-permitted assets under Regulation 1.25. The guidance also allows regulated firms to maintain required records exclusively on-chain.
The move applies to an industry holding a record $442.7 billion in customer segregated funds as of February 2026, according to the Futures Industry Association. It represents the culmination of a regulatory arc that began with the CFTC's Digital Assets Pilot Program in December 2025 and accelerated after the CLARITY Act failed its Senate cloture vote 49–50 on September 15, 2026, leaving agency-level rulemaking as the primary avenue for digital-asset market structure in the United States.
Three days before the FAQ update, Chairman Selig told the U.S. Treasury Market Conference at the Federal Reserve Bank of New York that markets must prepare for "mass tokenization." The September 25 guidance operationalizes that rhetoric.
On September 24–25, 2026, three CFTC divisions — Market Participants, Market Oversight, and Clearing and Risk — jointly published four new entries (Questions 13–15 plus a recordkeeping addendum) to their crypto-asset FAQ series originally released on March 20, 2026. The additions address two areas:
Investment of customer funds. FCMs and DCOs may place eligible customer funds into tokenized instruments under Regulation 1.25, provided the tokenized asset meets the rule's existing tests for liquidity, concentration, maturity, and custody.
Regulatory recordkeeping. Firms may create and maintain CFTC-required records on a blockchain or distributed ledger. Staff stated they would not object if firms chose not to keep offchain copies, provided the on-chain records satisfy Regulation 1.31 (general recordkeeping) and Regulation 45.2 (swap data records).
The guidance does not create new asset categories. Tokenization must wrap an already-permitted underlying investment. The distinction matters: a tokenized U.S. Treasury bill qualifies because the underlying bill already qualifies. A payment stablecoin does not, regardless of its backing, because stablecoins are not listed among Regulation 1.25 permitted investments.
Regulation 1.25 governs what FCMs and DCOs may do with customer funds — money posted as margin by futures and swaps traders that must be held in segregation. As of February 2026, the 52 registered FCMs in the United States held a record $442.7 billion in customer segregated funds, up 6% month-on-month and 26% year-on-year, per FIA data published April 14, 2026.
JP Morgan Securities held the largest share at $74 billion, up 37% year-on-year. The growth reflects both increased retail futures participation and elevated Treasury derivatives activity — daily futures turnover in Treasury markets rose from approximately $200 billion to $900 billion, and SOFR futures expanded from approximately $2 trillion to $5 trillion, according to data Chairman Selig cited at the Fed conference.
Permitted investments under Regulation 1.25 include:
The September 2026 guidance means tokenized versions of any of the above now qualify, provided four conditions are met.
The CFTC's eligibility framework establishes four requirements for a tokenized asset to be used for customer fund investment:
| Requirement | Standard | |---|---| | Underlying compliance | The asset beneath the token must independently satisfy Regulation 1.25 | | Equivalent rights | The token must grant holders legal and economic rights identical or functionally equivalent to the traditional asset | | Liquidity | The tokenized asset must be convertible to cash without substantial loss of value | | Custody | The token must be held at a permitted depository, with acknowledgment letters confirming segregation and lien-free status |
Specifically permitted: Tokenized U.S. Treasuries, tokenized government money market funds, tokenized certificates of deposit, tokenized Treasury ETFs.
Specifically excluded: Payment stablecoins (USDC, USDT, and others), regardless of reserve composition. The exclusion applies even to stablecoins issued by OCC-chartered national trust banks, though these same stablecoins are permitted as margin collateral under the separate Staff Letter 26-05 framework.
This distinction creates a two-tier system. For margin collateral (a different regulatory bucket), the CFTC's December 2025 pilot program and subsequent Staff Letter 26-05 permit FCMs to accept bitcoin, ether, and payment stablecoins — subject to a minimum 20% haircut for non-stablecoin crypto. For customer fund investment under Regulation 1.25, however, only tokenized versions of traditional permitted investments qualify.
The second component of the guidance addresses recordkeeping. The CFTC's Regulation 1.31 and Regulation 45.2 are technology-neutral by design. Staff confirmed that blockchain and distributed ledger technology satisfy these rules, with one caveat:
The practical effect is that an FCM could, in principle, maintain its entire regulatory books and records on a blockchain — a shift from the industry norm of centralized databases with periodic regulatory filings. Whether firms will actually migrate remains uncertain. Legacy infrastructure, audit workflows, and prime brokerage integrations present friction that a regulatory green light alone does not eliminate.
The September 2026 FAQ is the third step in a progression:
Step 1 — December 8, 2025: Acting Chairman Caroline Pham launched the Digital Assets Pilot Program, permitting select FCMs to accept bitcoin, ether, and USDC as collateral under strict custody, reporting, and oversight requirements. Participants filed weekly disclosures for the first three months. Staff Letter 25-39 addressed tokenized collateral; Staff Letter 25-40 (later revised as 26-05) provided a no-action position for digital assets as margin.
Step 2 — March 20, 2026: The CFTC published its initial crypto-asset FAQ series, establishing the analytical framework for how existing regulations apply to digital assets used by registered entities.
Step 3 — September 25, 2026: The FAQ update extended the framework from margin collateral to customer fund investment (Regulation 1.25) and formalized on-chain recordkeeping.
The tokenized Treasury market that would serve as the primary supply side for this demand stood at approximately $15.9 billion as of September 2026, a 144% increase from $6.51 billion in July 2025. The market spans 76 products and approximately 58,600 holders, with a weighted average 7-day APY of 3.36%. Top issuers include Circle (USYC), BlackRock (BUIDL), Ondo Finance (USDY), Franklin Templeton (BENJI), and Centrifuge (JTRSY).
The gap between $15.9 billion in tokenized Treasuries outstanding and $442.7 billion in FCM customer funds underscores both the opportunity and the bottleneck. Even modest FCM adoption would represent a meaningful demand shock for tokenized Treasury issuers. A 5% allocation from FCMs would exceed the current total supply.
The timing of the guidance is inseparable from the CLARITY Act's failure. The Senate's 49–50 cloture vote on September 15, 2026 — 11 votes short of the 60 required — ended the prospect of comprehensive digital-asset market-structure legislation in the current session. The dispute was not over the bill's core architecture (dividing oversight between the SEC and CFTC) but over ethics language governing officials' personal crypto holdings. No Democrat voted in favor despite 126 amendments sponsors incorporated at Democratic request.
With legislation stalled, the CFTC pivoted to what it could do unilaterally. Chairman Selig's September 22 speech at the Fed laid the rhetorical groundwork, positioning tokenization and 24/7 trading as structural inevitabilities. Three days later, the FAQ update translated that position into operational guidance.
The approach mirrors the SEC's own Regulation Crypto Assets (Reg CA) workstream and the OCC's trust charter issuance, all proceeding under existing statutory authority. Collectively, these agency actions constitute the de facto U.S. digital-asset regulatory framework in the absence of new legislation.
Industry input to the FAQ process came from dYdX Labs, the Blockchain Association, and the Solana Policy Institute, among others. The CFTC's June 16 request for information tied to Executive Order 14405 solicited broader comment, with final rules expected in 2027.
For tokenized Treasury issuers: FCM demand, if activated, would constitute a new institutional buyer class. Current tokenized Treasury supply ($15.9 billion) is a fraction of the addressable market ($442.7 billion in customer funds, of which up to 50% may be placed in qualifying money market instruments). Capacity constraints, not demand, may become the binding variable.
For FCMs: The guidance reduces a compliance ambiguity that previously made tokenized instruments a non-starter for risk-averse compliance departments. The question now shifts from "can we?" to "should we?" — a cost-benefit analysis involving custody infrastructure, counterparty risk assessment, and operational tooling.
For blockchain infrastructure: The recordkeeping provisions, if adopted, would place regulated financial data on-chain in a way that goes beyond the current use cases. FCMs filing regulatory records on-chain could accelerate demand for enterprise blockchain solutions with inspection and audit capabilities.
For stablecoin issuers: The explicit exclusion of stablecoins from Regulation 1.25 eligible investments — even as they are permitted for margin under a separate framework — creates a bifurcated regulatory status. This may limit stablecoin utility in the derivatives clearing ecosystem relative to tokenized Treasuries and money market funds.
The CFTC's FAQ update is administratively modest — four new entries to an existing document. Its implications are not. By confirming that $442.7 billion in customer segregated funds may flow into tokenized instruments, the agency has established a demand channel that dwarfs the current supply of tokenized Treasuries and money market funds. The simultaneous recognition of on-chain recordkeeping removes a second barrier that kept regulated firms from engaging with blockchain infrastructure.
Whether FCMs act on the guidance is a separate question from whether the guidance exists. Custody infrastructure, internal risk frameworks, and prime brokerage workflows must accommodate tokenized instruments before capital moves. But the regulatory permission structure is now in place, and the gap between $15.9 billion in tokenized Treasury supply and hundreds of billions in potential FCM demand defines the market's next capacity constraint.