The European Securities and Markets Authority has opened a consultation on the legal, liquidity and operational risks tied to tokenized collateral, as it examines whether clearing houses would be able to obtain and liquidate those assets during periods of market stress. The review will also help determine whether new European Union regulatory measures are needed. ESMA Chair Verena Ross said cross-border tokenization markets need legal certainty, interoperable infrastructure and appropriate oversight to operate safely and scale.
The exercise comes as tokenized collateral starts to enter Europe’s clearing system, where banks and investors can access securities more quickly to meet margin requirements. ESMA is also looking at whether current EU rules would allow clearing institutions to take control of and unwind tokenized collateral when a member defaults. The review covers tokenized representations of assets held in traditional financial infrastructure, assets issued natively on distributed ledgers, and their relationship with stablecoins, central bank money and tokenized deposits. The consultation follows recent market developments including Eurex Clearing’s DLT-based collateral service and the Eurosystem’s Pontes settlement initiative.
Odaily reported that the European Securities and Markets Authority, or ESMA, has issued a consultation paper seeking industry feedback on the legal, liquidity and operational risks of tokenized collateral. The review is intended to assess whether clearing houses can obtain and liquidate those assets during periods of market stress, and whether additional European Union regulatory measures are needed.
ESMA Chair Verena Ross said legal certainty, infrastructure interoperability and appropriate regulation are needed to create the conditions for the safe cross-border operation and scaling of tokenized markets.
Focus on clearing access and default handling
Tokenized collateral is entering Europe’s clearing business, allowing banks and investors to access securities more quickly to meet margin requirements. As part of the consultation, ESMA will also examine whether current EU rules can support clearing houses in obtaining and liquidating tokenized collateral when a member defaults.
Review also covers DLT-native assets and settlement links
In July 2025, Eurex Clearing launched a collateral service based on distributed ledger technology. JPMorgan has already completed the first real-time transaction for Dutch pension investor PGGM.
ESMA said it will also assess tokenized forms of assets held in traditional financial market infrastructure, assets issued natively on distributed ledgers, and their relationship with stablecoins, central bank money and tokenized deposits. In September 2025, the Eurosystem launched Pontes for settling tokenized asset transactions in central bank money, with links between blockchain infrastructure and existing settlement systems.
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