New Applications of Blockchain Assets in the Derivation Market

The cryptocurrency trading sector is undergoing a significant transformation, with more and more platforms beginning to use blockchain native assets as collateral in the derivation market to enhance capital efficiency. This trend is mainly reflected in two aspects: the application of stablecoins and tokenized government bonds.

Recently, a well-known cryptocurrency exchange platform announced that, after receiving approval from the Commodity Futures Trading Commission (CFTC), the USDC stablecoin will be accepted as collateral for margin futures. This marks the first time that USDC has obtained such qualification in the U.S. futures market. The platform's CEO stated that they will work closely with the CFTC to promote the implementation of this innovation. This business will be conducted through a qualified custodian regulated by the New York Department of Financial Services under the company.

At the same time, tokenized government bonds are gradually emerging in the derivation market. Digital asset company Securitize recently announced that a dollar-denominated institutional digital liquidity fund (BUIDL) from a large asset management company has now been accepted as collateral by two major cryptocurrency exchanges. This token represents a short-term yield fund backed by cash and U.S. Treasury bonds, with assets under management reaching $2.9 billion. By accepting BUIDL as margin, these platforms provide institutional traders with the opportunity to earn returns while engaging in leveraged trading.

These developments reveal that the market structure is evolving towards greater efficiency and transparency. Industry insiders point out that assets like USDC can achieve near-instant settlement and are widely recognized on both centralized and decentralized platforms. The co-founder and CEO of Securitize also stated that tokenized government bonds are actively being used in some of the industry's most advanced trading venues to enhance capital efficiency and risk management levels, while still providing returns.

These measures align with the suggestions made by CFTC Acting Chair Caroline D. Pham in November 2024. At that time, she urged companies to explore the use of distributed ledger technology for non-cash collateral. Pham believes that, given the success of asset tokenization in various fields, such as the issuance of digital government bonds in the Eurasian region, over $1.5 trillion in nominal scale of institutional repurchase and payment transactions on corporate Blockchain platforms, and more efficient collateral and funding management, adopting these new technologies would not undermine market integrity.

With these innovations continuously advancing, the structure and efficiency of the cryptocurrency trading market are expected to be further optimized, providing institutional investors with more diversified and flexible investment options.