BlackRock, Citi and 46 firms validate tokenised MMF collateral under US law

Global Digital Finance (GDF) and ISDA have jointly published a report concluding that tokenised money market funds (TMMFs) can function as institutional collateral in the United States across all three principal tokenisation models. The collateral mobility working group drew more than 300 participants from over 120 firms, among them BlackRock, Citi, JP Morgan, and Franklin Templeton, alongside derivatives clearing venues CME and ICE. Forty-eight firms participated in sandbox simulations run by Ownera. The report extends a comparable assessment of the UK and EU that GDF and ISDA published the previous year.

The analysis reviewed ten legal and regulatory dimensions and found existing US frameworks can accommodate TMMFs in most respects, with two defined exceptions. Money market funds remain ineligible as variation margin for cleared derivatives, where only cash is accepted. For uncleared initial margin, the Securities and Exchange Commission (SEC) has issued no specific guidance on tokenised securities, so the report treats them on the same footing as conventional securities. The central organising contribution of the report is a taxonomy distinguishing the three models by which record of ownership carries legal authority.

The findings arrive against a run of recent US regulatory clarification. The Commodity Futures Trading Commission (CFTC) issued tokenised collateral guidance in December, the SEC stated in January that tokenisation does not alter the application of securities laws, and SEC staff FAQs confirmed that a transfer agent may use a blockchain as the official shareholder record. Together, these moves suggest the regulatory surface area for TMMF collateral deployment is narrowing in a constructive direction, even if the variation margin gap and the absence of SEC initial-margin guidance leave material operational questions open.