Europe's markets regulator has opened a call for evidence on the safe use of tokenised collateral in EU central clearing, posing a practical stress test: can clearinghouses actually access such assets and convert them into liquidity when a clearing member defaults? The question goes to the core of how central counterparties (CCPs) operate — they stand between the two sides of trades and rely on collateral posted by their members to cover losses when one of them defaults. The consultation examines the conditions under which these EU CCPs can use such assets safely and effectively, with submissions due by January 15, 2027.

In a press release dated October 11, 2026, the European Securities and Markets Authority (ESMA) said its inquiry covers the transfer, management, protection and use of collateral. The regulator described tokenisation as having moved beyond the testing phase into day-to-day financial-market operations, with the mobilisation of collateral particularly relevant to central clearing.

Consultation examines tokenised collateral in EU clearing

The call for evidence seeks to establish how tokenised arrangements function in practice and how the existing framework can accommodate. Feedback will inform the authority's choice of regulatory or supervisory convergence action within its remit.

ESMA Chair Verena Ross linked the consultation to the goal of enabling tokenisation to develop safely and at scale across the Single Market. She said cross-border tokenised markets need legal certainty, interoperable infrastructure and appropriate supervision, while highlighting their potential to improve efficiency and integration.

Collateral must remain usable through a default

The review asks how tokenisation affects the entire collateral lifecycle — from initial transfer through management, protection and eventual use — particularly when a clearing member defaults. Respondents are asked to address clearinghouses' ability to obtain the assets, move them and convert them into liquidity when required.

Klaus Löber, Chair of ESMA's CCP Supervisory Committee, stressed that technological change must leave fundamental safeguards intact. In his view, collateral must continue to demonstrate high quality, legal enforceability, strong liquidity and ready operational availability, including during stressed market conditions and in the aftermath of a member default.

The inquiry also seeks views on changes to the risk profile of collateral that is already eligible. According to Cointelegraph, the consultation asks about redemption-related delays, transfer restrictions and whether token transfers confer ownership of, or enforceable rights to, the underlying assets.

Digital twins and ledger-issued assets in scope

Within its scope, the consultation examines digital twins — tokenised versions of assets that remain held in conventional infrastructure — alongside assets created natively on distributed ledger technology, plus hybrid models and how these interact with tokenised cash and other settlement assets, the instruments used to settle the cash side of transactions.

For tokenised collateral in EU markets, the review examines how distributed ledgers connect with conventional infrastructure while preserving client protection, segregation and settlement finality. The corroborating report identifies stablecoins, central bank money and tokenised deposits among the settlement assets under examination.

Live clearing use provides the backdrop

The consultation arrives against a backdrop of live deployment. The report notes that tokenisation has moved into active European clearing operations, driven by banks and investors seeking faster access to securities to meet margin requirements. In July 2025, Eurex Clearing launched a collateral service built on distributed ledger technology, with JPMorgan completing its inaugural live transaction by transferring securities from a separate custody location on behalf of Dutch pension investor PGGM.

The report also connects the consultation to the Eurosystem's September launch of Pontes, which enables tokenised asset transactions to settle in central bank money. According to the report, ESMA identified Pontes as a potential link between blockchain infrastructure and existing settlement systems for collateral arrangements.

Next steps

Stakeholders can submit contributions through the authority's consultation webpage until January 15, 2027. Responses will be published after the consultation closes unless respondents request otherwise. ESMA will evaluate the feedback in the first quarter of 2027, alongside its wider tokenisation work, before determining the appropriate course of action.