The European Securities and Markets Authority (ESMA) wants proof that clearinghouses can access tokenized collateral and turn it into cash if markets are under stress.
SMA published A call for evidence Friday to seek industry feedback on the impact of tokenized collateral.
“We must create the conditions for tokenized markets to operate safely and across borders, with legal certainty, interoperable infrastructure and appropriate oversight,” ESMA Chair Verena Ross said. said.
Tokenized collateral is entering live European clearing operations as banks and investors seek faster access to securities to meet margin requirements. ESMA’s review will help determine whether existing EU rules can ensure that clearinghouses can access and cancel such collateral in the event of a member’s default.
In July 2025, Eurex Clearing introduced A parallel service based on distributed ledger technology. JPMorgan executed the first live trade for Dutch pension investor PGGM, moving securities from another custody location.
Tokenized collateral faces liquidity and ownership verification
Suggestions include tokenized representations of assets held in traditional financial infrastructure and assets issued directly on distributed ledgers. It examines how those models interact with stablecoins, central bank money, and tokenized deposits.
ESMA said assets that are illiquid in traditional form may face additional risks when tokenizing, including delays due to restrictions on redemption procedures or transfers.
It also asked whether token transfers confer ownership or enforceable rights over the underlying asset.
Related: In 2027 ESMA will prioritize EU-wide AI and tokenization supervision
The advice follows the Eurosystem’s launch of Pontes in September, a system that allows financial institutions to settle tokenized asset transactions using central bank money. ESMA said Pontes could support tokenized collateral systems by connecting blockchain-based infrastructure to existing settlement systems.
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