Tokenized collateral is seen a strong use case for blockchain and DLT. Today collateral is stuck within siloed infrastructures and geography. A key reason is the delay in settlement, which can be instant using blockchain, enabling collateral mobility.

The vision is to have any liquid asset capable of being used as collateral for repo, margin, securities lending or other use cases, with worldwide interest.

In a recent European breakthrough, Eurex Clearing received approval from German regulator BaFin, to use digital collateral held on the HQLAᵡ platform for margin purposes. Now Euroclear is partnering with Digital Asset to explore collateral mobility for traditional finance firms, and the potential for crypto exchanges as well.

Across the Atlantic, the US Commodity Futures Trading Commission is planning to run a digital assets pilot for tokenized collateral.

And in Asia, the Japan Securities Clearing Corporation has been experimenting with tokenized collateral for margin, using the DTCC's digital assets infrastructure.