Citi and DTCC said that the collateral works are working, now the regulators must continue

Tokenizing collateral and moving it instantly across borders is no longer a theory, it’s 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 live in the US, UK, Hong Kong and Singapore. Known as Citi Token Services, the platform moves billions in real client transactions, supporting everything from blockchain payments to capital markets communities.

“It’s not used during the hours or weekends and holidays, which I think is really strong … We’re actually seeing them use it regularly, which is awesome,” Rugg said.

But scaling the system beyond a few corridors has proven difficult. According to Rugg, Citi must secure regulatory approval in each jurisdiction in which it operates, and the lack of common legal standards has slowed expansion. The goal, he 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, echoes that view. DTCC’s recent “great collateral experiment” showed that tokenized wealth, equity and money market funds can be used as collateral across time zones, even in trades involving crypto assets.

But he says the biggest lesson is that technology is no longer the barrier: market trust and legal enforcement are.

“We throw this word interoperability around freely and loosely,” Chakar said. “But what does that 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 like Swift to define common standards, not necessarily shared technology, but shared languages ​​and protocols.

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

Up front, the panelists agreed that progress will likely come in stages. In the short term, wallet-based infrastructure can complement traditional account-based systems. Over time, purses may become the new norm.

But even though the tracks are ready, the train won’t move until the regulators catch up.

“It’s the nature of (digital assets) that it just runs 24/7. It can go anywhere it wants,” Chakar said. “Our rules and laws … They are local in nature, right? The problem now is, when we issue a token, it can go anywhere.”