Announced4Proof of concept4Pilot3Live (limited)14Live (scaled)4
Why tokenise?
Draft analysis · not yet reviewed by the editor · updated 12 Oct 2026. The flows below are simplified for general understanding. Real implementations vary a great deal and are often far more complex.
Collateral is the bonds, fund shares or cash a firm hands over to back a trade or loan, so the other side is covered if it defaults. Today it is spread across many custodians and moves only within settlement windows. Tokenisation lets it change hands in minutes, at any hour, and lets assets such as money market fund shares serve as margin without being sold first.
Improves an existing processPledging and moving collateral is an everyday task. Tokenisation does not invent it; it makes it faster, possible outside business hours and usable with a wider range of assets. Posting a yield-earning fund token directly as margin is the closest thing to a new capability.
The problem today
Collateral sits in separate accounts at different custodians and depositories. Moving it from one to another goes through settlement chains, so a firm cannot always get the right asset to the right place in time for a margin call.Hours or even days to move collateral between custody locations, versus a couple of minutes on DLT (Eurex Clearing)[1]
Because settlement systems close at fixed cut-off times, firms keep spare collateral parked in each location just in case, where it earns little or nothing.Up to $15 billion of collateral idle per large firm; about $346 million a year in lost income for top institutions (Citi, with ValueExchange)[2]
Much margin is posted as cash, which earns no return, partly because investments such as fund shares are hard to deliver quickly.Around 60% of global margin sits in non-yielding cash (Citi)[2]
Margin calls during the day are becoming more common, but conventional markets largely lack a way to move collateral at the same instant as the payment.[3]
The market is large, so small frictions add up.Collateral market of more than $15 trillion (J.P. Morgan, 2022)[4]
Today vs tokenised (simplified)
End to end:hours to days→minutes
Todayend to end: hours to days
Clearing house or counterpartyIssues a margin call, often during the dayminutes
Firm's collateral teamSearches for eligible assets across many custodians and accountshours
Firm's collateral teamSends delivery instructions to the custodian holding the assetsbefore the cut-offremoved
Custodians and depositoriesMove the securities through settlement links in batch windowshours to daysremoved
Firm's treasuryIf the assets cannot arrive in time, posts cash instead, often by selling or redeeming fund holdingssame dayremoved
Both sidesReconcile their records to confirm what movedend of dayremoved
Clearing house or counterpartyConfirms receipt and credits the marginhours
Tokenisedend to end: minutes
Clearing house or counterpartyIssues a margin callminutes
Firm's collateral teamPicks eligible assets, including tokenised fund shares, from one view of its holdingsminutes
Shared ledgerRecords the change of ownership; the underlying securities can stay put at their custodiana couple of minutes
Shared ledgerChecks eligibility and haircuts automatically against agreed rulesseconds
Clearing house or counterpartySees the margin credited at once; a fund token keeps earning its yield while pledgedminutes
Securities move between custodians, or to a clearing house, in minutes by updating ownership on a ledger rather than shipping them through settlement chains.
EvidencedMeaningfulAvailable now
A couple of minutes instead of hours or days to move collateral (Eurex Clearing, used daily by members)Operator-reported[1]
Needs counterparties on the ledgerNeeds connected ledgers
Broadridge Distributed Ledger Repo (DLR): Broadridge's DLR moves tokenised repo collateral between counterparties and averaged $365 billion of repo a day in July 2026 ($8.0 trillion in the month). Broadridge does not break out how much of this is collateral movement as such, or give settlement times.[5]
Eurex Clearing DLT-based collateral mobilisation (via HQLAX): A year after launch, Eurex said clearing members use the HQLAX-based service every day, and that moving securities from another custodian to Clearstream for use as margin takes a couple of minutes instead of hours or even days. No volumes or member counts are disclosed.[1]
HQLAX and Deutsche Börse collateral basket swaps (Eurex Repo): One of the first live swaps, in December 2019, moved ownership of a basket of German government bonds held at Euroclear Bank to a counterparty whose collateral sat at Clearstream, without the securities themselves moving between the two depositories. Deutsche Börse's trusted third party linked the custodians to the registry. No timings or volumes were published.[6]
Kinexys Tokenized Collateral Network (TCN): In the first live trade on J.P. Morgan's Tokenized Collateral Network, BlackRock tokenised its interest in money market fund shares in a matter of minutes and passed it to Barclays as collateral for an OTC derivatives trade, with the transfer described as near instantaneous. The underlying fund shares did not have to move. No transaction values were disclosed.[7]
Tokenised money market fund shares can be posted directly as margin, so the same holding earns yield and backs trading at the same time, with no need to redeem it for cash first.
EvidencedMarginalAvailable now
Largest tokenised funds mid-2025: BUIDL about $2.5 billion, USYC about $0.5 billion (total size, not amounts pledged)Independent study[8]
BlackRock BUIDL as off-exchange collateral on Binance: Binance institutional clients can pledge BlackRock's tokenised BUIDL fund as trading collateral while it stays with a bank tri-party agent or Ceffu, so the same holding keeps earning its Treasury yield while it backs trading positions. The amounts pledged are not disclosed.[9]
Circle USYC as off-exchange collateral on Binance: Binance institutional clients (non-US only) can post USYC, a tokenised money market fund, as off-exchange collateral for derivatives, and Circle says it can be redeemed into the USDC stablecoin almost instantly. One token serves as a yield-bearing investment, as margin and as a route back to cash. Amounts pledged are not disclosed.[10]
BlackRock BUIDL as trading collateral on Crypto.com and Deribit: Deribit and Crypto.com began accepting BlackRock's tokenised BUIDL fund, then about $2.9 billion in size, as trading collateral for institutional and experienced clients, with the aim of lowering the margin cost of leveraged trading. How much BUIDL is actually pledged is not disclosed.[11]
Kinexys Tokenized Collateral Network (TCN): Tokenised BlackRock money market fund shares were pledged to Barclays as collateral for a derivatives contract, so a fund holding did a second job as margin. New York Fed staff cite it as the only such transaction in traditional markets they were aware of by mid-2025, and the legal documents had to be amended to allow fund shares to be delivered.[8]
Margin calls could be met at weekends or overnight, when today's settlement systems are closed.
Theory · low confidenceMeaningfulAs networks grow
Needs cash on the ledgerNeeds counterparties on the ledger
Canton Network on-chain US Treasury financing (industry working group): The first on-chain financing of US Treasuries against USDC on Canton was executed on a Saturday, outside normal market hours, with near-instant atomic settlement. Treasuries held at DTC were represented on Canton so they could be used as freely transferable collateral. One pilot trade; no amounts disclosed.[12]
New evidence in the register since this was written; due for review.
Collateral that arrives within minutes, and can pass straight to a creditor if a borrower defaults, shortens the time either side is exposed.
Theory · high confidenceMeaningfulAs networks grow
Needs counterparties on the ledgerNeeds cash on the ledger
Where it is now
29 tracked deployments, 18 live. 2 of 6 benefits evidenced in production.
Announced4Proof of concept4Pilot3Live (limited)14Live (scaled)4
The full potential
If clearing houses, banks and asset managers accept tokenised collateral across connected ledgers, a firm could treat its holdings as one pool and send the right asset anywhere within minutes, at any hour. That could release some of the collateral now parked in case of need, let more margin earn a return, and ease the scramble for cash in stressed markets. The near-term step is DTCC's tokenisation service and Eurex-style services that make existing securities mobile without changing where they are held.
Acceptance by clearing houses and regulators: the CFTC now allows case-by-case acceptance of tokenised Treasuries and fund shares, and the ECB accepts some DLT-issued assets as collateral since March 2026
Legal certainty that a pledge or transfer of a token is enforceable and final, including in insolvency
Cash on the ledger, ideally central bank money (the Eurosystem's Pontes service is due in Q3 2026)
Links between ledgers and with existing custodians, so collateral is not stuck in one walled garden
Updated collateral agreements that name tokenised assets as eligible
Who it suits
Bank, Broker-dealer or market maker, Asset manager, Specialist digital asset custodian, Market infrastructure (FMI), Crypto exchange, Investor (VC or PE) · effort: medium · value depends on counterparties joining
Collateral held at a custodian or depository connected to a ledger service
A counterparty or clearing house that accepts the tokenised asset
Collateral agreements amended to allow tokenised assets
Limits and open questions
Acceptance is still narrow. New York Fed staff found limited evidence of tokenised fund shares being accepted as collateral beyond crypto venues, and little visibility into how they are used.[8]
Fragmentation: each ledger is a separate record, and collateral on one platform cannot easily be used on another, which recreates the siloes tokenisation is meant to remove.[3]
Firms need certainty that settlement of both ownership and payment is final; without it, failures could cascade through leveraged markets.[13]
Regulators assess tokenised collateral case by case, looking at legal enforceability, custody and control, haircuts and operational risk, so acceptance is not automatic.[14]
Many live services are mirrors or ownership records of securities that stay at the depository, so servicing and much of the old plumbing stay in place and the gains are partial.[3]
[1]Eurex Members Mobilize Collateral on DLT— Markets Media, 24 Jul 2026. Accessed 12 Oct 2026. Timing and ECB/Pontes points quoted from or reported alongside a Eurex executive..C
[2]Digital Collateral: A Practical Reality— Citi, 24 Sep 2026. Accessed 12 Oct 2026. Industry study by a bank that sells tokenised collateral services, with ValueExchange; methodology not published on the page..C