<h2 id="header-0">Key Facts</h2>
<ul>
 <li>The European Securities and Markets Authority on Friday launched a call for evidence on whether EU central counterparties could safely use tokenized collateral.</li>
 <li>The paper asks how clearinghouses could access, transfer and convert tokenized collateral into cash, including after a clearing member defaults.</li>
 <li>Responses are due by Jan. 15, 2027, and ESMA plans to assess the feedback in the first quarter of 2027.</li>
</ul>
The European Securities and Markets Authority has asked the industry whether EU clearinghouses could safely accept tokenized collateral, including when a clearing member defaults, the regulator said on Friday.
The review targets central counterparties, which stand between buyers and sellers in cleared trades and rely on collateral to absorb losses when a member fails. ESMA said it is not reassessing or expanding the categories of assets clearinghouses may accept as collateral.
"The Call for Evidence is not intended to reassess or expand the categories of assets eligible as CCP collateral as such," ESMA wrote in the <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.esma.europa.eu/sites/default/files/2026-10/ESMA91-1505572268-4934_-_Call_for_evidence_tokenisation.pdf">paper</a>.
Instead, it asks whether tokenizing <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/collateral">collateral</a> that is already eligible changes its risk profile. The paper covers <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/tokenized-securities">tokenized securities</a>, including digital twins of existing assets and instruments issued natively on <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/distributed-ledger-technology-dlt">distributed ledger technology (DLT)</a>, as well as tokenized cash such as tokenized deposits, e-money tokens and <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/stablecoin">stablecoins</a>.
"Tokenisation has the potential to make Europe's financial markets more efficient, integrated and innovative," ESMA Chair Verena Ross said in a <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.esma.europa.eu/sites/default/files/2026-10/ESMA91-1505572268-5023_ESMA_seeks_evidence_on_the_use_of_tokenised_collateral_in_central_clearing_-_Press_release.pdf">statement</a>.
<h2 id="header-1">ESMA Flags Double Pledging and Liquidity Risks</h2>
The paper lists several risks that tokenization could add. Any gap between a token's records and the underlying asset's official record "may create risks of double pledging, inconsistent records of ownership or control," ESMA wrote.<tweet-embed url="https://x.com/ChrisBarrett/status/2108640265481388395"></tweet-embed>
It also flagged uncertainty over whether a token transfer conveys ownership, possible gaps between operational and legal settlement finality, and liquidity risks when conversion to cash depends on redemption processes or stablecoins that may deviate from par.
The call sets out 30 questions for clearinghouses, clearing members and their clients, market infrastructure providers and tokenization firms, though any interested party can respond. Responses are due by Jan. 15, 2027, and ESMA will assess them in the first quarter of 2027 before deciding on next steps.
The review adds to recent scrutiny of tokenization and crypto's ties to traditional finance by international and EU authorities. International Monetary Fund staff said on Thursday that <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/article/imf-tokenized-markets-small-illiquid-volatile-gfsr">tokenized markets remain small, illiquid and more volatile</a> than traditional ones, and ESMA in September <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/article/esma-flags-crypto-finance-links-as-risk-to-eu-markets">flagged links between crypto and traditional finance as a risk to EU markets</a>.
Read More:&nbsp;<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/article/everything-you-own-onchain-RWAs-tokenization">Everything You Own Will Live On-Chain Thanks to RWA Tokenization</a>

ESMA Asks Whether EU Clearinghouses Can Use Tokenized Collateral

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