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 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 live in the US, UK, Hong Kong and Singapore. Known as Citi Token Services, the platform already moves billions in real customer transactions and supports everything from supply chain payments to capital market settlements.
“It’s not used on breaks or weekends and holidays, which I think is really powerful … We actually see them using it regularly, 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 in which 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 this view. DTCC’s recent “Great Collateral Experiment” showed that tokenized government bonds, stocks and money market funds could be used as collateral across time zones, even in trades involving cryptoassets.
But she said the biggest lesson was that technology is no longer the barrier: market confidence and legal enforcement are.
“We throw around this word interoperability quite freely and loosely,” Chakar said. “But what does that really mean? Does it really work in practice? The answer is, no, it doesn’t.”
This is 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 clearing houses and networks like SWIFT to define common standards, not necessarily shared technology, but shared language and protocols.
Taurus co-founder Lamine Brahimi urged US 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 forward, panelists agreed that progress is likely to come in stages. In the short term, wallet-based infrastructure can complement traditional account-based systems. Over time, these wallets may become the new standard.
But even if the tracks are ready, the train won’t move until the regulators catch up.
“That’s the nature of it [digital assets] that only works 24/7. It can go anywhere it wants,” Chakar said. “Our rules and laws … they’re very local in nature, right? The problem now is that when we issue a token, it can go anywhere.”
