Coinbase Urges CFTC to Allow Regulated Stablecoins as Futures Collateral and Create DeFi Derivatives Rules
Coinbase submitted a formal policy letter to the CFTC on November 28, 2025, responding to the agency’s request for input on updating the 2022 President’s Working Group Report on Digital Assets. Chief Policy Officer Faryar Shirzad highlighted three core recommendations: 1) permit vertically integrated trading models with strict conflict‑of‑interest protections and independent oversight; 2) establish a tailored, principles‑based regulatory category for DeFi derivatives that recognizes decentralised protocol structures; and 3) allow high‑quality, regulated stablecoins to be used as initial and variation margin in U.S. futures markets. Coinbase argued current derivatives rules—designed for centralized intermediaries—do not fit blockchain native markets and risk pushing innovation offshore. The firm noted its subsidiaries’ experience as a registered futures commission merchant and designated contract market, and said stablecoin collateral would enable 24/7 settlement and lower counterparty risk. The submission aligns with broader bipartisan momentum for clearer U.S. crypto rules and follows signals from CFTC leadership urging coordination and innovation‑friendly policy. If adopted, Coinbase’s proposals could keep DeFi and stablecoin derivatives activity onshore and improve market efficiency for retail and institutional traders.
Bullish
Allowing regulated stablecoins as futures collateral and creating tailored DeFi derivatives rules is likely bullish for crypto markets. Short term: the proposal reduces structural frictions (limited collateral options, settlement windows), which can boost trading volumes, reduce funding costs and increase derivatives liquidity—positive catalysts for spot and derivatives demand. Market reaction may be modestly positive as traders price in regulatory clarity and potential product expansion. Long term: a clear, US‑centric framework would lower jurisdictional risk, attract institutional counterparties, and keep DeFi innovation onshore — driving higher adoption and capital inflows. Historical parallels: regulatory clarifications (e.g., clearer ETF approval pathways or US‑friendly custody rules) have previously supported inflows and price appreciation. Risks remain: implementation could be slow, the CFTC may impose restrictive conditions, or inter‑agency disputes (SEC, bank regulators) could dilute benefits, muting the bullish effect. Overall, the net impact favors increased market access, liquidity and institutional participation—constructive for price discovery and long‑term growth.