ESMA Opens Tokenised Collateral Review

The European Securities and Markets Authority has launched a Call for Evidence on the potential use of tokenised collateral by central counterparties, or CCPs. Published on 9 October 2026, the consultation asks whether tokenised forms of collateral could be used safely and effectively by EU CCPs, and under which conditions. Interested stakeholders can submit contributions until 15 January 2027.

This is an evidence-gathering consultation rather than an approval for CCPs to accept or use tokenised collateral. ESMA has not concluded that tokenised collateral is safe, eligible or operationally ready for central clearing. Its stated next step is to assess the feedback received during the first quarter of 2027 and then determine the most appropriate course of action within its remit.

The review is focused on the entire collateral lifecycle. ESMA is seeking views on how tokenisation may affect the transfer, management, protection and use of collateral, rather than examining issuance technology in isolation. That scope matters because collateral in central clearing must remain available and legally protected when market conditions are stressed.

In particular, ESMA wants evidence about what would happen if a clearing member defaults. The authority is examining whether a CCP could access, transfer and convert tokenised collateral into liquidity when needed. It is also asking how client protection, segregation and settlement finality could be ensured when distributed ledger technology interacts with traditional market infrastructures.

What ESMA is examining

ESMA’s Call for Evidence covers more than one tokenisation structure. One model involves tokenised versions of assets that remain held in traditional infrastructures, which ESMA describes as digital twins. Another involves assets issued directly on distributed ledger technology, while the consultation also covers hybrid arrangements and their interaction with tokenised cash and other settlement assets.

The distinction between these models is important for the consultation because the operational and infrastructure links may differ. A digital twin is described by ESMA as a tokenised version of an asset held in traditional infrastructure, whereas an asset issued directly on distributed ledger technology begins on that technology. The authority is requesting evidence on how each approach would operate across the collateral lifecycle.

Default-period liquidity is one of the clearest practical questions in the review. In a clearing member default, ESMA is asking whether tokenised collateral could be accessed, transferred and converted into liquidity when required. This frames tokenisation as a question of usable collateral under stressed conditions, not simply a question of recording ownership or transferring an asset in normal conditions.

Client protection and segregation are also expressly within scope. ESMA is seeking views on how those protections could be ensured where distributed ledger technology interacts with traditional market infrastructures. Settlement finality is another named issue, meaning respondents are being asked to address how finality would be ensured in these arrangements rather than assuming it follows automatically from tokenisation.

The consultation further asks whether and how tokenising collateral that is already eligible may change that collateral’s risk profile. This is a significant boundary in ESMA’s request: the question is not limited to whether an underlying asset was previously acceptable. The authority is also examining the consequences of representing or arranging that collateral in tokenised form.

What happens after the response deadline

Stakeholders have until 15 January 2027 to provide their contributions through ESMA’s consultation process. ESMA states that responses will be published after the consultation closes unless a respondent requests otherwise. That publication approach may allow market participants to see the range of submitted views, subject to those requests.

ESMA plans to assess the feedback in the first quarter of 2027. Following that assessment and its wider work on tokenisation in financial markets, the authority says it will determine the most appropriate course of action. Its statement refers to possible regulatory or supervisory convergence action within its remit, but does not commit to a particular measure.

For CCPs, clearing members, collateral providers and infrastructure participants, the immediate relevance is the set of questions ESMA has identified. Evidence that addresses conversion into liquidity during a default, protection of client positions, segregation and settlement finality is directly aligned with the regulator’s published scope. The consultation therefore provides a defined opportunity to describe how a tokenisation model would work across normal operations and a member-default scenario.

The development should not be read as confirmation that tokenised collateral can already be used by EU CCPs. ESMA is still collecting evidence on the conditions under which such use could be safe and effective. The assessment scheduled for early 2027 will follow the response period, and any later regulatory or supervisory direction remains dependent on ESMA’s evaluation.

• Response deadline: 15 January 2027.
• Core default question: whether a CCP could access, transfer and convert tokenised collateral into liquidity when needed.
• Protection questions: client protection, segregation and settlement finality where distributed ledger technology meets traditional market infrastructure.
• Models in scope: digital twins, assets issued directly on distributed ledger technology, and hybrid arrangements involving tokenised cash or other settlement assets.

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