New Trends in the Crypto Market: Blockchain Native Assets Become the Market Maker for Collateral

Recently, crypto asset trading platforms have increasingly adopted blockchain native assets such as USDC, as well as products like tokenized government bonds launched by a certain asset management company, as collateral to improve the efficiency of the derivatives market.

These tools not only have stability but also provide returns, while complying with regulatory requirements, making them highly attractive to institutional investors seeking capital optimization.

On June 18, a derivatives trading platform under a well-known cryptocurrency exchange announced that after obtaining approval from the Commodity Futures Trading Commission (CFTC), USDC will be accepted as collateral for margin futures. This marks the first time USDC has been used as collateral in the U.S. futures market.

The CEO of the exchange stated that they will work closely with the CFTC to promote the implementation of this innovation. This new initiative will rely on the exchange's custodial trust company to implement it, which is regulated by the New York Department of Financial Services and is a qualified custodian.

At the same time, tokenized government bonds have also begun to emerge in the derivatives market. On the same day, a digital asset company announced that a dollar institutional digital liquidity fund from a large asset management company can now be used as collateral on two major cryptocurrency trading platforms.

This token represents a short-term income fund backed by cash and U.S. Treasury bonds, currently managing assets of $2.9 billion. By accepting this token as collateral, these platforms enable institutional traders to earn additional returns while engaging in leveraged trading.

These latest developments highlight that the market structure is shifting towards a more efficient and transparent direction. Industry insiders point out that assets like USDC can achieve near-instant settlement and are widely recognized across various trading platforms.

The co-founder and CEO of a digital asset company also stated that tokenized government bonds are being actively used in some advanced trading venues to enhance capital efficiency and risk management, while still providing returns for investors.

These measures also echo the recommendations made by CFTC Acting Chair Caroline D. Pham last November. She encouraged companies to explore the application of distributed ledger technology in non-cash collateral management. Pham believes that, considering the successful tokenization of assets in various fields, such as the issuance of digital government bonds in the Eurasian region, large-scale institutional repurchase and payment transactions on enterprise Blockchain platforms, adopting these new technologies will not undermine the integrity of the market.

As these innovations continue to advance, the infrastructure of the crypto market is gradually improving, providing more convenience and security for institutional investors' participation. This trend is expected to continue driving the integration of crypto finance with traditional finance, bringing new development opportunities to the entire industry.