Citi and DTCC Say Tokenized Collateral Works, Now Regulators Must Keep Pace

Executives from Citi, DTCC, and Taurus discussed the successful implementation of tokenized collateral at the SmartCon conference in New York. Citi's Ryan Rugg highlighted that their tokenized cash system is operational in several regions, facilitating billions in transactions. However, regulatory hurdles are impeding wider adoption. The banks noted that while technology has advanced, the lack of harmonized legal standards presents the greatest challenge. DTCC's Nadine Chakar emphasized the importance of market trust and legal enforceability, indicating that vastly different systems have been developed across firms, complicating interoperability. To address these issues, there is a call for global cooperation to create common standards for tokenization. Taurus's Lamine Brahimi pointed out the risks of fragmentation without coordination, urging U.S. institutions to adopt regulatory measures similar to those in Switzerland. Panelists agreed that regulatory synchronization is essential for the future of cross-border financial transactions, and progress will come in stages, potentially starting with wallet-based infrastructures complementing existing systems.

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