ESMA opens review of tokenised collateral for EU clearing

The European Securities and Markets Authority (ESMA) has opened a call for evidence on tokenised collateral at EU clearing houses, asking how it could be used safely. In its 9 October announcement, the EU markets regulator said it wants responses by 15 January 2027. The review matters because clearing houses rely on collateral—assets posted to cover risk—and may need to access it quickly if a member defaults.

What kinds of tokenised collateral is ESMA examining?

ESMA is asking about several ways to represent or issue assets using distributed ledger technology (DLT), a shared digital record system. These include “digital twins”, or tokenised versions of assets held in traditional systems, as well as assets issued directly on a DLT network. The review also covers hybrid arrangements and how they might work with tokenised cash and other settlement assets.

The authority is examining how these models could affect collateral as it is transferred, managed, protected and used. It also wants to know whether tokenising assets that are already eligible as collateral would change their risk profile.

What must clearing houses be able to do in a crisis?

They must be able to access and transfer the collateral, then convert it into cash or other liquidity when needed, including after a clearing member defaults. ESMA is also asking how client assets could remain protected and separate, and how settlement could be treated as final when DLT systems connect with traditional market infrastructure.

ESMA says existing safeguards must still apply: collateral must be high quality, legally enforceable, highly liquid and operationally available in stressed conditions. The call is meant to establish how tokenised arrangements work in practice and whether the current framework can accommodate them safely.

Who can respond, and what happens next?

ESMA is inviting central counterparties (CCPs), the firms that stand between buyers and sellers in cleared trades, along with clearing members, their clients, market infrastructure providers and tokenisation or DLT firms. Legal experts, industry groups and other stakeholders involved in collateral or post-trade services are also invited, according to the consultation page.

Responses are due by 15 January 2027. ESMA says it will assess the feedback in the first quarter of 2027, then decide whether to take regulatory or supervisory action within its remit. The call seeks evidence; it does not announce a change to the rules or confirm that tokenised collateral is approved for use by EU clearing houses.

References

• 9 October announcement — esma.europa.eu
• consultation page — esma.europa.eu