ESMA opens tokenized-collateral evidence call, with responses due 15 January 2027

The European Securities and Markets Authority has opened a call for evidence on whether central counterparties in the EU might use tokenized collateral.¹ Interested parties can send contributions until 15 January 2027, giving the exercise a defined period for gathering views.¹ ESMA has not set out a quantity of collateral or a target for adoption in the information announcing the call; the stated change is the launch of an inquiry into potential use.¹ The inquiry asks participants to address how tokenization could work in clearing, what it could mean for risk, and how collateral might be handled when liquidity is needed.¹

The scope includes digital representations of assets that remain within conventional infrastructure, as well as assets created directly on distributed-ledger technology.¹ By including both approaches, ESMA is seeking evidence across distinct ways of connecting an asset to tokenization, rather than limiting the discussion to one model.¹ The call also covers hybrid arrangements, where tokenized and other forms may operate together, and how those arrangements relate to tokenized cash and other settlement assets.¹ These topics place the question of collateral within a wider set of settlement arrangements, though the announcement does not specify which model will be preferred.¹

A central practical issue is whether a CCP could obtain tokenized collateral, move it, and convert it into liquid funds when required.¹ ESMA gives particular attention to a default by a clearing member, the situation in which the authority wants to understand how access and conversion could work.¹ This focus connects the technology question to the ability to use collateral under stress, rather than treating tokenization only as a change in how assets are represented.¹ The call seeks information about these processes; the published description does not state that CCPs already have a particular method for carrying them out.¹

Participants are also being asked whether tokenizing collateral that is already eligible could alter its risk profile.¹ That framing distinguishes the collateral's existing eligibility from the possible effect of changing its form or the system through which it is managed.¹ ESMA is requesting views on whether such a change matters for risk, not announcing that tokenization does change the profile.¹ The question sits alongside the operational inquiry into access, transfer, and conversion, so the evidence call covers both the handling of collateral and its possible risk implications.¹

ESMA President Verena Ross has described tokenization as having the capacity to improve efficiency, integration, and innovation in European financial markets.¹ Her account presents those benefits as potential outcomes, while the call itself is intended to gather evidence about how tokenized collateral might be used by EU CCPs.¹ Ross has also emphasized the need to establish conditions under which tokenized markets can operate securely and across national borders.¹ That emphasis places safe operation and cross-border activity alongside the possible market benefits, rather than treating efficiency as the only consideration.¹

Klaus Löber, who chairs ESMA's CCP Supervisory Committee, has linked tokenization to potentially more efficient collateral mobilization and closer integration among EU post-trade markets.¹ His comments connect the subject to the movement of collateral and to the organization of market activity after trading.¹ Löber has also stressed that the core protections attached to CCP collateral should remain unchanged.¹ Together, his stated view holds out possible operational gains while maintaining the existing safeguards as a constraint on how those gains are pursued.¹

The people invited to contribute are interested parties, and ESMA's announcement asks them to provide evidence on the models, settlement links, operations, and risk questions within the call.¹ The announcement does not give a headcount of affected firms or participants, nor does it quantify how much collateral could be involved.¹ Its stated reach is defined instead by the subject: potential use by EU CCPs and the arrangements that could support access to, movement of, and conversion of tokenized collateral.¹ This means the evidence sought concerns both the infrastructure choices and the consequences for the way collateral can be mobilized, without the announcement assigning a numerical scale to either.¹

After the submission period ends, ESMA plans to publish the responses, except where contributors ask for their submissions not to be made public.¹ The stated publication approach therefore allows public access to responses while recognizing requests from contributors for different treatment.¹ ESMA says it will assess the feedback during the first quarter of 2027 and then decide whether regulatory or supervisory steps may be appropriate.¹ The announcement describes that as a later decision following review of the evidence; it does not specify in advance which action, if any, ESMA will take.¹

The wider context set out by ESMA combines the prospect of more efficient and integrated markets with the need for tokenized markets to function securely across borders.¹ For CCPs, the discussion also joins possible improvements in collateral mobilization and post-trade integration to the requirement that fundamental collateral protections stay in place.¹ The call tests these themes against practical questions about tokenization models, settlement assets, liquidity conversion, and the risk of collateral that is already eligible.¹ Its next stated milestones are the response deadline of 15 January 2027 and ESMA's planned review in the first quarter of 2027, after which the authority will consider possible regulatory or supervisory action.¹