ESMA opens inquiry into tokenised collateral for EU clearing

ESMA launched a call for evidence on 9 October to assess whether EU central counterparties can safely use tokenised collateral, and what safeguards that would require. In central clearing, clearing members post collateral to cover losses if they default: assets are selected, transferred to a CCP, valued and monitored, then accessed or sold if a member fails. ESMA’s announcement of the call says the review focuses on how tokenisation could affect that process from transfer through protection and use.

Tokenisation means representing an asset or right digitally on a distributed ledger, where transfers and other lifecycle events can be recorded and, potentially, automated. ESMA is asking whether that digital layer changes how collateral moves, who can claim it, or how quickly a CCP can turn it into usable funds. The call does not propose expanding which asset types qualify as collateral; it asks how tokenisation might affect assets already eligible.

How could a token represent collateral?

ESMA’s call for evidence paper describes two broad models, plus hybrid arrangements. A “digital twin” is a token linked to an asset that remains recorded in traditional systems, such as a custodian or securities depository. Think of it as a digital label for an asset held elsewhere: the token may help identify or allocate the asset, but the traditional system may still control ownership records and the steps needed to sell it.

In a native model, the asset is issued, held and transferred on a ledger. Posting and monitoring collateral could also happen there. Either way, a CCP must know which record determines ownership, and whether the asset can be transferred and converted to funds when needed. Tokenised cash, including central bank money or other settlement assets, could also interact with the collateral process.

What does ESMA want to test?

The regulator is asking about legal certainty, client asset segregation, settlement finality, liquidity, haircuts and operational resilience. In a clearing member default, the practical test is whether the CCP can access the posted asset, transfer or prepare it for sale, and realise value in time to manage losses. A token that moves quickly on a ledger may still depend on a custodian, a traditional settlement system or available buyers before it becomes usable cash.

ESMA says tokenisation does not remove the underlying legal, credit, market, liquidity or operational risks. CCP collateral must remain legally enforceable, liquid and operationally available, including under stress. The authority is gathering evidence on whether current EU rules and supervisory expectations can accommodate these arrangements safely, rather than assuming a new collateral regime is needed.

When will ESMA decide what comes next?

CCPs, clearing members and clients, market infrastructures, tokenisation providers and other stakeholders can respond by 15 January 2027. ESMA says it will assess the feedback in the first quarter of 2027 and then decide whether regulatory or supervisory action within its remit is appropriate.

Source material

• announcement of the call — esma.europa.eu
• call for evidence paper — esma.europa.eu