CFTC Advisers Recommend Use of Tokenized Assets as Collateral

The use of money-market fund tokens from the likes of BlackRock Inc. and Franklin Templeton as collateral in traditional derivatives trades inched closer to reality on Thursday.

The Global Markets Advisory Committee of the Commodity Futures Trading Commission voted to approve use of tokenized non-cash collateral and to send its recommendations to the full CFTC.

The recommendations don’t have the force of official policy until the commission incorporates them into future guidance or rule-making. The agency can decide how and whether to use the recommendations, but because the advisory committees provide relevant expertise, their recommendations often are used by the ...