ESMA seeks evidence on the use of tokenised collateral in central clearing

AI summary of the source article

The European Securities and Markets Authority (ESMA) has issued a Call for Evidence exploring the potential use of tokenised collateral by central counterparties (CCPs). As tokenisation transitions from testing into real-world use, ESMA aims to assess how digital twin assets and natively issued distributed ledger technology assets impact the transfer, management, and protection of collateral. The regulator is particularly focused on liquidity, legal enforceability, client protection, and operational access during a clearing member default. Stakeholders must submit contributions by 15 January 2027, with ESMA planning to evaluate feedback in the first quarter of 2027 to decide on relevant regulatory or supervisory actions.

Why it matters

The initiative could shape regulatory frameworks governing how EU clearinghouses handle digital assets and distributed ledger technology, directly impacting collateral mobilization and market infrastructure.

Key facts

• ESMA launched a Call for Evidence regarding tokenised collateral use by EU central counterparties (CCPs).
• Stakeholder contributions are open until 15 January 2027, with feedback assessment planned for Q1 2027.
• The inquiry examines various models including digital twin assets and assets issued directly on distributed ledger technology.