Citi and DTCC Highlight Challenges in Tokenized Collateral Regulation
- Citi’s tokenized cash system, known as Citi Token Services, is operational in the U.S., U.K., Hong Kong, and Singapore, processing billions in transactions.
- Regulatory approval is required for expansion into new jurisdictions, slowing progress due to a lack of harmonized legal standards.
- DTCC’s “Great Collateral Experiment” showed that tokenized assets can be used as collateral across time zones, but market trust and legal enforceability remain significant barriers.
- Taurus co-founder Lamine Brahimi urged U.S. institutions to adopt national standards similar to those in Switzerland to avoid fragmentation and compliance issues.
- Panelists suggested that wallet-based infrastructure could eventually complement traditional systems as regulations evolve.
The advancement of tokenized collateral technology is underway, yet regulatory frameworks lag behind, complicating broader adoption across financial systems.
Despite the successful operation of Citi’s platform moving billions regularly, the need for regulatory alignment remains critical for future growth and interoperability.(Source)
