Tokenizing collateral and moving it instantly across borders is no longer a theory; it happens. But during 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, regulations have 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 markets settlements.
“It’s not being used after hours, on weekends, on holidays, which I think is really powerful…We actually see them using it on a regular basis, which is great,” Rugg said.
But scaling up that system beyond a few corridors has proven difficult. According to Rugg, Citi must receive regulatory approval in every jurisdiction in which it operates, and the lack of harmonized regulatory standards has slowed its expansion. The goal, she says, 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’ has shown that tokenized treasuries, stocks and money market funds can be used as collateral across time zones, even in transactions involving crypto assets.
But she said the biggest lesson was that technology is no longer the barrier: market trust and legal enforceability are.
“We throw this word interoperability around very 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 companies have built their own tokenization systems with different assumptions, legal structures, and smart contract designs. DTCC is now working with global clearinghouses and networks such as 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 lead of Switzerland, where national legal and technological standards for tokenized assets are already in place. He warned that without coordination, financial firms risk fragmentation, security issues and costly compliance mismatches.
Looking ahead, panelists agreed that progress will likely come in phases. In the near term, wallet-based infrastructure could complement traditional account-based systems. Over time, these wallets could become the new standard.
But even if the tracks are completed, the train won’t run until regulators catch up.
“It’s the nature of it [digital assets] that simply runs 24/7. It can go anywhere it wants to go,” Chakar said. ‘Our rules and laws… are very local in nature, right? The problem now is that if we issue a token, it can go anywhere.”