Tokenizing collateral and instantly moving it across borders is no longer a theory, it is happening. But in a panel discussion at the SmartCon conference in New York on Wednesday, executives from Citi, DTCC and Taurus warned that while technology has caught up, regulation has not.
Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said the bank’s tokenized cash system is available in the US, UK, Hong Kong and Singapore. Known as Citi Token Services, the platform is already moving billions in real customer transactions, supporting everything from supply chain payments to capital markets settlements.
“It’s not used after hours or on weekends or holidays, which I think is really powerful… In fact, we’re seeing it used regularly, which is wonderful,” Rugg said.
But expanding that system beyond a few riders has proven difficult. According to Rugg, Citi must obtain regulatory approval in each jurisdiction where it operates, and the lack of harmonized legal standards has slowed expansion. The goal, he said, is to build a frictionless multi-bank, multi-asset network (something more like how email works today), but the rules don’t exist yet.
Nadine Chakar, global head of digital assets at DTCC, echoed that sentiment. DTCC’s recent “Great Collateral Experiment” demonstrated that tokenized Treasuries, stocks, and money market funds could be used as collateral across time zones, even in trades involving cryptoassets.
But he said the most important lesson was that technology is no longer the barrier: market trust and legal enforceability are.
“We use this word interoperability quite loosely and loosely,” Chakar said. “But what does it really mean? Does it really work in practice? The answer is no, it doesn’t.”
This is partly because most companies have created their own tokenization systems with different assumptions, legal structures, and smart contract designs. DTCC is now working with clearinghouses and global networks like SWIFT to define common standards – not necessarily shared technology, but shared language and protocols.
Taurus co-founder Lamine Brahimi called on US institutions to follow the example of Switzerland, where national legal and technological standards already exist for tokenized assets. He warned that without coordination, financial firms risk fragmentation, security vulnerabilities and costly compliance gaps.
Looking ahead, panelists agreed that progress is likely to come in stages. In the short term, wallet-based infrastructure could complement traditional account-based systems. Over time, those wallets may become the new standard.
But even if the rails are ready, the train won’t move until regulators catch up.
“It is the nature of [digital assets] which simply operates 24 hours a day, 7 days a week. You can go wherever you want,” Chakar said. “Our rules and laws… are very local in nature, right? The problem now is that when we issue a token, it could go anywhere.”
