In the not too distant future, it may be possible to use DLT-based collateral as margin for commodities and derivatives trading. Bloomberg reported that a sub committee of the Commodity Futures Trading Commission (CFTC) Global Markets Advisory Committee (GMAC) has voted to recommend a proposal to accept DLT-based collateral.
There are still multiple steps before approval. The proposal now needs to be considered by the full GMAC committee. If GMAC endorses it, then the CFTC needs to decide.
That could mean public blockchain money market funds such as BlackRock’s BUIDL and Franklin Templeton’s FOBXX could be used for collateral. So far Treasuries tokenized on permissionless blockchains total about $2 billion. However, these changes would also apply to permissioned blockchain initiatives. Broadridge’s DLR tokenizes Treasuries for repurchase agreements (repo) and supports more than a trillion in transactions monthly. JP Morgan also has a Tokenized Collateral Network in which BlackRock is a participant.
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