Citibank·DTCC "Tokenized collateral, technology is ready... the challenge is regulatory alignment"

JH Kim

Summary

Citibank and DTCC said that, in collateral transfers using tokenized assets, regulatory alignment is a more important issue than technical problems.
Citibank said its token service is processing live transactions in several countries, but each country's regulatory approval processes are a constraint on expansion.
DTCC also explained that interoperability and securing legal enforceability of the tokenized collateral infrastructure, along with coordination among regulators, are key to full market expansion.

Citibank and the Depository Trust & Clearing Corporation (DTCC) pointed out that transfers of collateral using tokenized assets face regulatory alignment as a bigger challenge than technical issues.

On the 5th (local time), according to crypto-focused media CoinDesk, at the 'SmartCon' conference held in New York, Ryan Rugg, head of Citibank's digital assets division, said, "Citi's token service is currently processing live transactions in the United States, the United Kingdom, Hong Kong, and Singapore," adding, "Technically there are no issues, but each country's regulatory approval processes are a major constraint on service expansion."

Nadine Chakar, DTCC's global head of digital assets, explained, "The tokenized collateral infrastructure is already sufficiently validated, but interoperability and securing legal enforceability are the key issues," and added, "Coordination among regulatory agencies must be achieved for full market expansion to be possible."

Industry experts assessed that the remarks from the two institutions indicate that tokenized collateral and the construction of digital payment infrastructure are moving beyond the 'technical experimental stage' and preparing for integration with real financial systems.