The European Securities and Markets Authority (ESMA) has opened a review into tokenized collateral, seeking evidence that European clearinghouses can access tokenized assets and convert them into cash if markets come under stress. Clearinghouses sit at the center of Europe's derivatives and securities markets, standing between buyers and sellers and collecting margin collateral that must be quickly available when a member fails.

The EU markets regulator published a call for evidence on Friday to gather industry feedback on the implications of tokenized collateral for central clearing. A call for evidence is an early-stage consultation through which regulators gather market input before deciding whether new rules or guidance are needed.

“We must create the conditions for tokenized markets to operate safely and at scale across borders, with legal certainty, interoperable infrastructures and appropriate supervision,” ESMA Chair Verena Ross said in the accompanying press release.

Tokenized collateral is entering live European clearing operations as banks and investors seek faster access to securities to meet margin requirements. ESMA's review will help determine whether existing EU rules can ensure that clearinghouses are able to access and liquidate such collateral when a member defaults.

In July 2025, Eurex Clearing introduced a collateral service based on distributed ledger technology, which the clearinghouse described as a first among central counterparties globally. JPMorgan executed the first live transaction for Dutch pension PGGM, moving securities from another custody location.

Tokenized collateral faces liquidity and ownership scrutiny

The consultation covers tokenized representations of assets held in traditional financial infrastructure as well as assets issued directly on distributed ledgers. It also examines how those models interact with stablecoins, central bank money and tokenized deposits.

ESMA noted that even assets that are liquid in their traditional form may face additional risks once tokenized, including delays caused by redemption procedures or restrictions on transfers. The authority also asked whether token transfers confer ownership or enforceable rights over the underlying assets.

The consultation follows the Eurosystem's September launch of Pontes, a system that allows financial institutions to settle tokenized asset transactions using central bank money. ESMA said Pontes could support tokenized collateral arrangements by connecting blockchain-based infrastructure with existing settlement systems.

ESMA has also said it intends to prioritize EU-wide AI and tokenization supervision in 2027.