Tokenized collateral puts custody and settlement in focus

Eurex Clearing said in a Nov. 2 announcement that it plans to bring traditional and native digital instruments under one clearing framework, rulebook and risk model. Digital securities, including issuances by the European Stability Mechanism, would be eligible to trade in Eurex Repo’s GC Pooling segment, clear through Eurex Clearing and serve as margin collateral. Participants would use existing clearing relationships and infrastructure, while the securities would qualify for the ECB GC Pooling basket. Eurex said the approach is intended to preserve existing liquidity pools rather than divide activity between traditional and digital markets.

Richard Clark, CEO of Zodia Custody, told crypto.news that custody and settlement systems must work together as tokenized assets move continuously. “Collateral only earns its keep when it can move in real time while staying segregated until the point of settlement,” he said, warning that releasing assets from custody early reintroduces the risk custody is meant to remove. Zodia’s Interchange network is described by the company as enabling institutional trading, borrowing and lending while assets remain in custody until settlement. Its product materials cite segregated wallets, automated net settlement and support for multi-party transactions, including collateral management.

Societe Generale’s Prime Services and Clearing division accepted $10 million in tokenized US Treasuries on Canton, the bank said in a Nov. 2 statement. The transaction used assets created through the soft launch of the Depository Trust & Clearing Corporation’s Tokenisation Service. The bank said the Treasury representations moved onchain and were recorded in its existing back-office and collateral systems under its governance, risk and control framework. Salim Nemouchi, the bank’s global head of Prime Services, said the transaction connected tokenized securities with financing markets where clients could use them.

Regulators are also examining safeguards. The Bank of England’s consultation covers tokenized versions of collateral already eligible under its proposed CCP Rulebook, with draft expectations on liquidity, valuation, settlement finality, operational resilience and safeguarding. It distinguishes contractual settlement finality from legal protection against transfers being unwound after insolvency. In the EU, ESMA is reviewing whether clearing houses can access, transfer and convert tokenized assets into liquidity if a clearing member defaults. Responses are due by Jan. 15, 2027, with evidence assessment planned for the first quarter.