Tokenized collateral brings custody and settlement closer together

Tokenized collateral has moved further into mainstream financing as Eurex Clearing has outlined plans to accept digital securities and Societe Generale has completed a $10 million Treasury transaction, bringing new demands on how custodians protect assets until settlement. Summary Eurex plans to bring native digital securities into its existing clearing and margin framework. Societe Generale accepted $10 million in tokenized US Treasuries as collateral on Canton. Zodia Custody CEO Richard Clark says assets should remain segregated until settlement. UK and EU authorities are examining collateral safeguards, legal ownership and access during defaults. Richard Clark, CEO of Zodia Custody, told crypto.news that institutions adopting tokenized collateral need custody and settlement infrastructure that can work together as assets move around the clock. His comments follow announcements from clearing houses, banks and regulators addressing how blockchain-based securities can enter established financing arrangements without weakening the controls applied to conventional assets. “Tokenising an asset does nothing to lower the standard it has to meet, which is why the clearing houses and bank...