BlackRock, Citi, 46 firms in tokenized MMF collateral trials with GDF and ISDA

Global Digital Finance and ISDA have released a comprehensive report confirming that tokenized money market funds can function as institutional collateral within the United States. The study involved over 120 firms, including industry giants like BlackRock, Citi, JP Morgan, and Franklin Templeton, alongside clearing houses CME and ICE. Through sandbox simulations conducted by Ownera with 48 participating firms, the group analyzed three distinct tokenization models against ten legal and regulatory dimensions. While the findings suggest these models align with existing frameworks, the report notes that money market funds remain ineligible as variation margin for cleared derivatives. Furthermore, the lack of specific SEC guidance on uncleared initial margin necessitates treating tokenized assets as conventional securities for now. This initiative builds upon recent regulatory clarifications from the CFTC and SEC regarding blockchain-based shareholder records and securities law application. By establishing a clear taxonomy for ownership records, this work provides a critical roadmap for the institutional adoption of tokenized assets in financial markets.