As financial giants test cross-asset collateral, they say legal gaps — not tech — are the biggest threat to scale.

Nov 5, 2025, 7:54 p.m.

Tokenizing collateral and moving it instantly across borders is no longer a theory, it’s happening. But at a panel discussion at the SmartCon conference in New York on Wednesday, executives from Citi, DTCC and Taurus warned that while the technology has caught up, regulation hasn’t.

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Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said the bank’s tokenized cash system is live in the U.S., U.K., Hong Kong and Singapore. Known as Citi Token Services, the platform is already moving billions in real client transactions, supporting everything from supply chain payments to capital markets settlements.

“It’s not used off hours or weekends and holidays, which I think is really powerful … We’re actually seeing them use it on a regular basis, which is wonderful,” Rugg said.

But scaling that system beyond a few corridors has proven difficult. According to Rugg, Citi must secure regulatory approval in every jurisdiction where it operates, and the lack of harmonized legal standards has slowed expansion. The goal, she said, is to build a frictionless, multi-bank, multi-asset network — something closer to how email works today — but the rules aren’t there yet.

Nadine Chakar, global head of digital assets at DTCC, echoed that view. DTCC’s recent “Great Collateral Experiment” demonstrated that tokenized treasuries, equities and money market funds could be used as collateral across time zones, even in trades involving crypto assets.

But she said the biggest lesson was that technology isn’t the barrier anymore: market trust and legal enforceability are.

“We throw around this word interoperability quite freely and loosely,” Chakar said. “But what does it really mean? Does it really work in practice? The answer is, no, it doesn’t.”

That’s partly because most firms have built their own tokenization systems with different assumptions, legal structures and smart contract designs. DTCC is now working with global clearinghouses and networks like SWIFT to define common standards, not necessarily shared technology, but shared language and protocols.

Taurus co-founder Lamine Brahimi called on U.S. institutions to follow Switzerland’s lead, where national legal and technological standards for tokenized assets are already in place. He warned that without coordination, financial firms risk fragmentation, security vulnerabilities and costly compliance mismatches.

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’s the nature of [digital assets] that just operates 24/7. It can go anywhere it wants to,” Chakar said. “Our rules and laws ... they’re very local in nature, right? The problem now is, when we do issue a token, it could go anywhere.”

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