ESMA asks if tokenised collateral can work in EU clearing

Firms involved in EU clearing can now submit evidence on whether tokenised assets could serve as collateral at central counterparties (CCPs), with responses due by 15 January 2027. ESMA says it wants to understand how these arrangements would work safely and effectively.

The call could shape how tokenised assets are handled in clearing, but it does not itself make them eligible collateral.

What is ESMA asking market participants to assess?

ESMA’s announcement on the call for evidence says the regulator is examining how tokenisation could affect collateral transfers, management, protection and use across its lifecycle. The consultation covers tokenised versions of assets held in traditional infrastructures, known as “digital twins,” as well as assets issued directly on distributed ledger technology (DLT).

It also asks about hybrid arrangements and their interaction with tokenised cash and other settlement assets. For CCPs, the practical test is whether they could access, transfer and convert tokenised collateral into liquidity when needed, including if a clearing member defaults. ESMA is also seeking views on client protection, segregation and settlement finality where DLT connects with traditional market infrastructure.

Who can respond, and how?

The call is aimed at CCPs, clearing members and their clients, as well as central securities depositories, custodians, triparty agents and providers of tokenisation or DLT solutions. Legal experts, industry associations and other groups involved in collateral management or post-trade services are also invited to contribute, according to ESMA’s consultation page.

Responses must be submitted online using ESMA’s reply form by 15 January 2027. The regulator asks contributors to identify the question they are answering, explain their reasoning and describe alternatives it should consider. Contributions are due to be published after the call closes unless a respondent requests that they remain undisclosed; ESMA warns that personal data included in a submission will be published as submitted.

What happens after the deadline?

ESMA says it will assess responses in the first quarter of 2027 and then decide on the appropriate next steps, which could include regulatory or supervisory convergence action within its remit. The call is gathering evidence on whether the existing framework can accommodate tokenised collateral; it is not a decision to accept new collateral types.

ESMA’s CCP Supervisory Committee chair Klaus Löber said the safeguards for CCP collateral must remain in place: it must be high quality, legally enforceable, highly liquid and operationally available, including under stress and after a clearing member default. For firms considering a response, that makes the default scenario central: they will need to explain how the collateral can be controlled and turned into liquidity when a clearing member fails.

Source material

• announcement on the call for evidence — esma.europa.eu
• ESMA’s consultation page — esma.europa.eu