Tokenized Collateral Must Solve Interoperability, Custody and Regulatory Equivalence to Scale
At Abu Dhabi Finance Week 2025, a panel including Redwan Meslem (Enterprise Ethereum Alliance), Andrej Majcen (Bitcoin Suisse), Sabrina Wilson (GFOX) and Helen Ye (Qubit Underwriting) examined what’s needed for tokenized collateral to reach institutional scale. Panelists agreed tokenization is not just technical but systemic: usable collateral requires reliable valuation, legal enforceability, 24/7 mobilization and rapid liquidation. Custody and real-time control—summed up by “not your keys, not your coins”—are critical for enforceability under pressure. Interoperability across venues and legacy systems was highlighted as the primary unlock: token standards (eg. ERC-based frameworks) matter only if they enable capital velocity and composability across clearing, settlement and collateral workflows. Regulators need to accept token-native custodians as equivalent to banks; regulatory equivalence across jurisdictions and institution types is more important than novelty. The panel’s pragmatic outlook: tokenized collateral will complement — not immediately replace — traditional systems, delivering faster settlement, reduced counterparty risk and more efficient capital use. Adoption hinges on converging standards, regulation and infrastructure, with potential expansion of eligible assets if trust and connectivity are established.
Neutral
The panel’s conclusions point to structural enablers rather than immediate market-moving events. This news is neutral for crypto markets because it signals progress in institutional adoption—improving long-term fundamentals—while not promising near-term liquidity or price spikes. Key positive drivers for bullishness (clear custody models, interoperability standards, and regulatory equivalence) remain conditional and require multi-party coordination and time to implement. Historically, regulatory clarity and custody solutions (for example institutional custody rollouts and custody partnerships in 2020–2021) have supported sustained inflows and long-term price appreciation, but they did not always trigger immediate rallies unless paired with concrete product launches or large capital commitments. Short term: traders may not react strongly; event-driven volatility is unlikely absent major regulatory rulings or large institutional deployments. Long term: successful convergence of standards, custody, and regulation would be bullish—enabling higher institutional capital efficiency, broader collateral usage and deeper markets. Risk factors that could keep impacts muted include regulatory fragmentation, failed interoperability implementations, or custody incidents undermining confidence.