CFTC Tokenized Collateral FAQ: What Brokers Can Do With Your Cash

On 24 September 2026, staff at the Commodity Futures Trading Commission (CFTC) answered a narrow but practical question: can the firms that hold customer money for futures trading invest it in tokenized versions of assets they are already allowed to buy? The staff answer starts with “yes,” followed by a list of conditions.

If you keep cash at a regulated broker, the more useful question is broader. What is the firm allowed to do with your balance while it holds it, and where is that written down? This update is a good place to practice reading the answer.

What did the CFTC change on 24 September 2026?

CFTC staff updated a set of frequently asked questions on crypto assets. The CFTC press release 9303-26 says three divisions (Market Participants, Market Oversight, and Clearing and Risk) updated the FAQs to cover investing customer funds in tokenized forms of permitted investments and using blockchain technology for recordkeeping.

The release says the FAQs were first released on 20 March 2026, so this is an update rather than a new document. It also says the update builds on staff letters 25-39 and 26-05. CFTC Chairman Michael Selig is quoted saying it is consistent with the agency’s efforts to provide regulatory clarity for the crypto industry. CoinDesk reported the update the same day.

Who do these answers apply to?

They apply to futures commission merchants (FCMs) and derivatives clearing organizations (DCOs). An FCM is, in plain terms, the broker that holds your account and margin when you trade futures. A DCO is a clearinghouse that sits in the middle of trades and also holds margin. The CFTC glossary defines both.

Both hold money that belongs to customers. Regulation 1.25 lists what they may invest it in. The list includes US government debt such as Treasury bills, some state and agency debt, government money market funds, certain Treasury index funds and the government debt of a short list of countries.

An earlier CFTC staff letter, 25-39, describes a tokenized asset as a digital representation of a real-world asset. So the question is simple: if a Treasury bill is allowed, is a token version of that Treasury bill allowed too?

What conditions did CFTC staff set?

Per the FAQ document, the firm has to be able to show four things:

Condition	In plain English
The underlying asset is already a permitted investment	No new asset types, only new wrappers
The token gives the same or functionally equivalent legal and economic rights	The token must be as good a claim as the paper version
The investment meets the rule’s other terms	Limits on liquidity, concentration and maturity still apply
An acceptable depository holds the tokens	Custody still has to be at an approved place

For tokenized government money market funds, the staff also expect the firm to get a written acknowledgment letter from whoever holds the fund shares. That is paperwork from the custodian, not a promise about the fund.

One earlier answer in the same document is worth knowing. Asked whether a broker may invest customer funds in payment stablecoins, the staff answer is no. A broker may only place its own payment stablecoins in segregated customer accounts, as a cushion of its own money. Segregated accounts are the ones set aside for customers, apart from the firm’s general accounts.

What does this mean for your money?

It means less than the headlines suggest, and the details are where the value is.

1. The asset underneath doesn’t change. The FAQ is about token versions of things a broker could already hold. It does not let a broker put your margin into crypto in general.
2. The rights test is the part to care about. If a token doesn’t carry the same or functionally equivalent rights, the staff answer doesn’t cover it.
3. Custody still matters. Tokens must sit with an acceptable depository.
4. The footnote matters as much as the answer. The FAQ says it represents only the views of the divisions, may not be relied upon to create any new binding rules, and does not necessarily represent the views of the Commission.

None of this says customer money is now safer or riskier, and we are not saying that either.

Can firms keep records on a blockchain?

Yes, staff say they would not object, if the firm fully meets the recordkeeping rule. The FAQ says Regulation 1.31, the CFTC’s recordkeeping rule, is technology neutral, so a firm may use blockchain or distributed ledger technology for required records.

There is a catch for public blockchains, the open kind anyone can join. The FAQ says firms using them should have systems and controls to keep and produce records under any circumstances, including an emergency or a network disruption. In short, if the chain has a bad day, the firm still has to hand over its records. CoinDesk added that a firm on a private network may not need to keep offchain copies.

What doesn’t this update do?

It doesn’t regulate spot crypto exchanges, where you buy and hold the coin itself. CoinDesk notes the update came the week after the Senate failed to advance the Digital Asset Market Clarity Act, which would have given the CFTC powers over crypto spot markets. CoinDesk says that gap “remains a regulatory hole.” We covered what the agency did next in our explainer on the CFTC’s crypto rule filing, and the vote itself in what changed after the Clarity Act failed.

What are the risks and limits?

• Staff views can change. They are not Commission rules.
• “Functionally equivalent” has no published list. The firm must meet and show the test itself.
• Public-chain records depend on the firm’s own outage controls, which the staff flagged.
• Headlines can overstate it. The document is a narrow answer about permitted investments.
• It is not a signal to open, move or close any account.

What would change this view?

We read this as a narrow, non-binding staff answer that does not change what the underlying asset must be. If the Commission adopts a binding rule on tokenized permitted investments, the non-binding point no longer holds. If staff publish a list of tokens that meet the rights test, proving it gets easier for firms. If the FAQ is withdrawn or narrowed, the whole answer changes. Either way, the dated document outranks any summary, including this one.

A four-question check for any firm that holds your cash

1. Who holds my cash?
2. Who regulates that firm, and for which product?
3. What is it allowed to invest my cash in while it holds it?
4. Does that answer come from a rule, or from a staff view that could change?

Here is how it reads on two examples. The second is made up.

Question	Futures account at a US broker	An app found through an ad (made-up)
Held by	The futures commission merchant	Unclear
Regulated by	The CFTC	Unclear
Can invest in	The Regulation 1.25 list, plus tokenized forms meeting the four conditions (staff view)	Not stated
Rule or staff view	The list is a rule; the tokenized part is a staff view	None found

Four blanks tell you where to start reading.

What to watch next

Watch for further updates to these FAQs, public statements from brokers or clearinghouses that they use tokenized permitted investments and with which custodians, any Commission rule proposal on the topic, and spot-market legislation in Congress. Each should appear first in a dated official source, such as the CFTC press release page or the bill’s record in Congress.