Collateral Mobility is “Holy Grail” of Tokenization
RWA Signal Insight
InfrastructureIndustry leaders at the Digital Assets Week conference in London identified collateral mobility as the primary driver for RWA tokenization, with State Street's Kim Hochfeld labeling it the "killer app" for the sector. By enabling real-time movement of assets like tokenized money market funds, firms aim to replace inefficient traditional finance processes and improve balance sheet management. State Street’s 2026 Digital Assets Study reveals that 51% of asset managers expect digital assets to reach mainstream adoption within five years, up from 11% in 2024. To facilitate this transition, State Street and Galaxy Asset Management launched the SWEEP fund, allowing 24/7 onchain cash management using PYUSD stablecoins. However, experts from BlackRock and BNY emphasize that scaling requires significant regulatory and legal clarity, particularly regarding the treatment of tokenized Treasuries and money market funds as collateral. Meanwhile, Euroclear is advancing the Pythagore project to tokenize the €310 billion European commercial paper market, aiming for full migration to digital infrastructure by 2028. These developments underscore a broader institutional shift toward building resilient, onchain financial infrastructure that bridges traditional and digital markets.
Key points
- State Street's 2026 study shows 51% of managers expect digital asset mainstreaming within five years.
- State Street and Galaxy launched SWEEP, a tokenized liquidity fund supporting PYUSD stablecoin subscriptions.
- Euroclear's Pythagore project targets tokenization of the €310 billion European commercial paper market.
- BlackRock and BNY executives cite regulatory clarity on collateral treatment as the primary scaling hurdle.
Background
State Street is a global financial services firm providing investment management and servicing, while Galaxy is a digital asset-focused financial services company. Together, they developed the SWEEP fund to provide institutional investors with a bridge between traditional cash management and onchain liquidity. Euroclear is a major international central securities depository that provides settlement and custody services for various financial instruments.