In a new blog post marking the 10th anniversary of the ISDA Standard Initial Margin Model, the International Swaps and Derivatives Association (ISDA) identified tokenization and 24/7 trading as its next major areas for improving derivatives market infrastructure. ISDA is working with members on a proof of concept to demonstrate how its documentation can support the exchange of tokenized collateral and to identify required updates to credit support documents and related legal opinions, advancing its existing work on tokenized assets as margin collateral. Tokenized collateral could enable continuous margin transfers when conventional collateral and funding are unavailable, supporting the risk management needed for 24/7 trading. ISDA said near-instantaneous settlement could also reduce counterparty risk, improve intraday liquidity and collateral mobility, and facilitate the use of money market funds as collateral. Wider adoption will require clarity on custody and segregation, capital and margin treatment, cross-border recognition and legal certainty, primarily through targeted adaptations to existing rules and standards rather than a separate regulatory framework.
2026-09-28ISDA
International Swaps and Derivatives Association develops tokenized collateral proof of concept to support continuous trading
The International Swaps and Derivatives Association is developing a proof of concept for exchanging tokenized collateral under its documentation, including potential updates to credit support documents and legal opinions. The work is intended to enable continuous margin movement for 24/7 trading, but requires regulatory and legal clarity on custody, capital treatment and cross-border recognition.