ESMA consults on the use of tokenised collateral by central clearing counterparties

PANews October 9 news: The European Securities and Markets Authority (ESMA) has published a consultation paper seeking views on whether and under what conditions EU central counterparties (CCPs) can safely and effectively use tokenized collateral, covering "digital twins" of traditional assets, natively issued on-chain assets, and hybrid models, and focusing on issues such as the realizability of tokenized collateral in the event of a clearing member default, segregation of client assets, and settlement finality. The consultation period ends on January 15, 2027, and ESMA will assess the feedback in the first quarter of 2027 and decide on next steps.