TL;DR
Get business pricing on office and shipping supplies
- Business-only prices and quantity discounts
- Tax-exempt purchasing
- Multiple users, one account, clear invoices
The European Securities and Markets Authority has opened a call for evidence on whether and under what conditions EU central counterparties could use tokenised collateral safely. Stakeholders can respond by 15 January 2027; ESMA plans to assess submissions in the first quarter of 2027 before deciding whether further action is needed.
The European Securities and Markets Authority (ESMA) is asking market participants how tokenised collateral could be used in central clearing by EU central counterparties (CCPs), and what safeguards would be needed. The call for evidence examines whether existing arrangements can handle tokenised assets safely across the collateral lifecycle, including when a clearing member defaults.
ESMA’s call focuses on the transfer, management, protection and use of collateral. It seeks evidence on whether tokenised arrangements would allow CCPs to access collateral, move it and convert it into liquidity when needed. A particular concern is whether those actions would remain possible during market stress or after a clearing member fails.
The regulator is examining several models: digital twins, or tokenised representations of assets held in traditional infrastructure; assets issued directly on distributed ledger technology (DLT); and hybrid arrangements combining traditional and DLT-based systems. The request also covers how these models might interact with tokenised cash and other settlement assets.
ESMA is seeking views on whether tokenising collateral that is already eligible for CCP use changes its risk profile. It also asks how client protection, segregation and settlement finality could be maintained when DLT systems interact with established market infrastructure. Stakeholders are invited to submit responses through ESMA’s consultation webpage by 15 January 2027.
Collateral Must Work Under Stress
Collateral supports the risk management of central clearing: CCPs rely on it to cover exposures and manage the consequences of a clearing member’s default. A tokenised asset may move or settle differently from an asset held through conventional systems, so the practical ability to access and liquidate it promptly matters alongside its stated value and eligibility.
ESMA’s questions reach beyond whether a token can represent an asset. They concern whether legal rights remain enforceable, whether assets can be transferred across different infrastructures, and whether they can be turned into usable liquidity when markets are under pressure. Any gaps could affect CCP risk controls and protections for clients.
The call is an evidence-gathering step, not a decision to permit or prohibit tokenised collateral. Its outcome could inform whether current rules and supervisory practices can accommodate these arrangements or whether further work is needed. For firms developing tokenised markets, the process signals that operational performance and established collateral protections will be central to regulators’ assessment.
digital asset collateral management tools
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
ESMA Tests Models Against Existing Safeguards
ESMA describes tokenisation as moving from testing toward real-world use in financial markets, with collateral mobilisation an area of particular relevance to central clearing. The authority’s stated aim is to understand how different models operate in practice, rather than assume that all tokenised assets or systems present the same risks.
Its call links potential efficiency gains with the safeguards that apply to CCP collateral. Klaus Löber, chair of ESMA’s CCP Supervisory Committee, said collateral must remain high quality, legally enforceable, highly liquid and operationally available, including in stressed conditions and following a clearing member default. ESMA is asking whether tokenised arrangements can meet those conditions and whether the existing framework can accommodate them.
ESMA Chair Verena Ross framed the initiative as part of the authority’s broader work on tokenisation across the EU Single Market. She said that safe development at scale would require legal certainty, interoperable infrastructures and appropriate supervision. The call therefore examines both the mechanics of collateral and how tokenised markets connect across borders and systems.
“Collateral must be of high quality, legally enforceable, highly liquid, and easily operationally available, including in stressed conditions and following a clearing member default.”
— Klaus Löber, chair of ESMA’s CCP Supervisory Committee
blockchain-based collateral transfer platform
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Key Operational Questions Remain Open
ESMA has not concluded that tokenised collateral is safe or suitable for CCP use, and the call does not announce a change to existing requirements. The practical answers are still open: whether a CCP could reliably take control of, transfer and liquidate tokenised collateral during a default, and how quickly those steps could be completed under stressed conditions.
The call also seeks evidence on how legal enforceability, client segregation and settlement finality would work when DLT arrangements connect with traditional infrastructures. The source material does not specify which models, assets or technical standards might ultimately be accepted, or whether ESMA expects rule changes. The impact on the risk profile of already eligible collateral is a question for respondents, not a finding by the regulator.
As an affiliate, we earn on qualifying purchases.
Responses Due in January 2027
Market participants and other stakeholders can submit evidence through ESMA’s consultation webpage by 15 January 2027. ESMA says it will publish responses after the call closes unless respondents ask for their submissions not to be published.
The authority plans to assess the feedback in the first quarter of 2027. After that review, and in light of its wider work on tokenisation in financial markets, ESMA will determine the appropriate next steps. These could include regulatory or supervisory convergence action within its remit; the call does not commit the authority to any particular outcome.
distributed ledger technology (DLT) compliance software
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Key Questions
What is ESMA asking stakeholders to provide?
ESMA wants evidence on how tokenised collateral works across its lifecycle and whether EU CCPs could use it safely. Its questions include transfer and liquidation in a default, legal enforceability, client protection, segregation and settlement finality.
Which tokenisation models are covered?
The call covers tokenised representations of assets held in traditional infrastructures, assets issued directly on DLT, and hybrid arrangements. It also asks how these may interact with tokenised cash and other settlement assets.
When is the response deadline?
Stakeholders are invited to respond through ESMA’s consultation webpage by 15 January 2027.
Has ESMA approved tokenised collateral for central clearing?
No approval or rule change is announced in the call. ESMA is gathering evidence to assess whether tokenised arrangements can meet existing safeguards and whether further regulatory or supervisory action may be appropriate.
When will ESMA decide what to do next?
ESMA says it will assess responses in the first quarter of 2027. It will then determine an appropriate course of action based on that feedback and its wider work on financial-market tokenisation.
Source: primary
Halloween Picks
halloween
As an affiliate, we earn on qualifying purchases.
