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Tokenized cash and collateral rails are already moving billions across Citi’s network, but scaling beyond a handful of corridors now depends on regulators, not engineers, executives warned at Chainlink’s SmartCon conference in New York. DTCC’s Nadine Chakar and Citi’s Ryan Rugg argued that fragmented legal standards—rather than technology—are the main drag on global deployment. (CoinDesk)
What Executives Said
- Citi Token Services is live in the U.S., U.K., Hong Kong and Singapore, processing real client transactions ranging from supply-chain payments to capital markets settlements.
- DTCC’s Great Collateral Experiment proved that tokenized treasuries, equities and money market funds can travel across time zones, but legal enforceability and interoperability remain unresolved.
- “We throw around the word interoperability quite freely... The answer is, no, it doesn’t [work in practice],” Chakar cautioned, pointing to mismatched smart-contract designs and legal assumptions across marketplaces.
- Taurus co-founder Lamine Brahimi urged U.S. institutions to emulate Switzerland’s harmonized digital-asset standards to avoid fragmentation risks.
Why It Matters
Institutional clients are demanding 24/7 settlement, intraday liquidity recycling and composable collateral—all use cases tokenization can unlock. Without consistent rulebooks, however, banks must seek approval jurisdiction by jurisdiction, slowing adoption and increasing compliance costs. The panelists warned that a patchwork of bespoke networks would erode the very efficiencies tokenization promises.
Next Steps
- DTCC is collaborating with global clearinghouses and networks like SWIFT to define shared messaging and legal protocols, even if underlying technology stacks differ.
- Citi is expanding wallet-based infrastructure that can bridge account-based and token-based systems, positioning banks to serve clients on both rails simultaneously.
- Market participants expect phased adoption: wallet pilots first, broader interbank token networks later, contingent on regulatory harmonization.
- Policymakers in the U.S., EU and Asia now face pressure to modernize securities and payments law so tokenized collateral can interoperate across borders.
Disclaimer: This article summarizes remarks made at a public conference and is not investment advice. Institutions should consult legal counsel before deploying tokenization solutions.