Tokenizing collateral and instantly moving it across borders is no longer a theory, it’s happening. 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, regulation has not.
Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said the bank’s tokenized cash system is operational in the US, UK, Hong Kong and Singapore. Known as Citi Token Services, the platform already transfers billions of real-world transactions with clients, supporting everything from supply chain payments to capital markets settlements.
“It’s not used after hours, weekends and holidays, which I think is really powerful… We actually see them using it regularly, which is wonderful,” Rugg said.
But expanding this system beyond a few corridors has proven difficult. According to Rugg, Citi must obtain regulatory approval in every jurisdiction where it operates, and the lack of harmonized legal standards has slowed its 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” demonstrated that tokenized Treasuries, stocks, and money market funds could be used as collateral across time zones, even in transactions involving crypto assets.
But the biggest lesson, she says, is that technology is no longer an obstacle: market trust and respect for the law are.
“We use this word interoperability quite loosely and vaguely,” Chakar said. “But what does that actually mean? Does it really work in practice? The answer is no, it doesn’t.”
This is 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 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 for tokenized assets are already in place. He warned that without coordination, financial firms risk fragmentation, security vulnerabilities and costly compliance disparities.
Looking ahead, panelists agreed that progress will likely come in stages. In the short term, wallet-based infrastructure could complement traditional account-based systems. Over time, these wallets could 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 operates 24/7. He can go wherever he wants,” Chakar said. “Our rules and laws… they are very local in nature, right? The problem now is that when we issue a token it can go anywhere.
