DTCC has published research, developed with Finadium, on tokenised collateral and near real-time collateral mobility.
The paper argues that digital representations of traditional assets such as bonds, money market funds and cash could help financial institutions reduce liquidity buffers, lower some capital requirements and manage market stress more effectively. It focuses on how distributed ledger-based systems could speed the movement of collateral across markets and time zones, including outside normal trading hours.
The findings come as financial markets adjust to shorter settlement cycles and growing interest in digital assets. Against that backdrop, the research makes a business case for infrastructure that supports just-in-time collateral management to reduce fragmentation and improve operational consistency.
Core findings
One central claim is that tokenised versions of traditional financial assets offer the clearest near-term balance sheet benefit. The paper says these assets could move more quickly across jurisdictions and platforms while remaining within existing regulated frameworks, giving firms greater precision in capital, liquidity and risk management.
The report also identifies intraday repo as a potential source of lower funding costs. Rather than relying on overnight funding or daylight overdrafts, firms could in theory obtain secured funding on a minute-by-minute basis through a digital ledger. The paper argues this could halve intraday funding costs and release capital at large dealer banks.
It also examines the effect of faster collateral movement on regulatory metrics. Moving collateral in near real time could reduce reported end-of-day exposures, which may in turn lower liquidity coverage ratio requirements and counterparty credit risk charges, while improving return on capital.
The study further argues that interoperable digital ledger infrastructure could make markets more resilient during periods of stress. By allowing tokenised assets to move more smoothly across markets and time zones, the model could reduce the need for forced asset sales during volatility and address some of the weaknesses exposed in previous liquidity shocks.
AppChain model
DTCC linked the research to its Collateral AppChain, which it describes as shared infrastructure for collateral providers, receivers, managers, triparty agents and custodians. The system is intended to provide a common foundation for collateral movement across participants that often operate through fragmented technology and market structures.
The paper presents this type of shared ledger as a way to improve the speed, accuracy and efficiency of collateral transfers. For large financial institutions, collateral management has become a more pressing operational issue as funding markets, margin demands and settlement timetables have tightened.
That pressure has increased as banks and dealers try to limit the cost of carrying high-quality liquid assets while still meeting regulatory obligations. In practice, firms often maintain sizeable buffers because moving eligible collateral between entities, custodians and jurisdictions can be slow, especially near market close or outside local business hours.
The report argues that tokenisation could change that equation by making collateral more mobile without altering the underlying assets. Rather than replacing conventional securities, the approach would create digital representations that can be transferred and updated more quickly, with data and rules embedded in the asset record.
For market participants, the practical appeal lies less in the technology itself than in the opportunity to use balance sheet resources more efficiently. If firms can move collateral when needed instead of pre-positioning larger buffers, they may be able to reduce funding costs and free up capital for other uses.
Industry push
The research adds to a broader industry effort to test whether tokenised forms of existing assets can solve long-standing operational frictions in repo, collateral and settlement. While much of the public debate around digital assets has focused on cryptocurrencies, major market infrastructure groups and banks have increasingly concentrated on tokenising conventional instruments within regulated financial systems.
That distinction matters because collateral management depends on legal certainty, operational reliability and broad market acceptance. Any new system must work across a wide network of counterparties, custodians and infrastructure providers if it is to move beyond limited pilots.
Nadine Chakar, Managing Director and Global Head of Digital Assets at DTCC, said the paper sets out the economic case for that shift. "Digital assets represent the next phase of capital and liquidity optimization in global markets," Chakar said. "As these assets evolve into smart assets with embedded data and programmability, financial institutions can achieve greater precision in collateral allocation, liquidity forecasting, and capital planning. This paper serves as a blueprint for the material value to be generated from adoption."
DTCC said its subsidiaries processed securities transactions worth USD $4.7 quadrillion in 2025, while its depository subsidiary provided custody and asset servicing for securities issues from more than 150 countries and territories valued at USD $114 trillion.