Digital finance regulation and tokenized asset collateral management

The ABBL has submitted a response to the European Commission regarding the review of the Markets in Crypto-Assets (MiCA) regulation. The association advocates for a pragmatic approach focused on refining the existing framework rather than a fundamental redesign. Key priorities include enabling innovation in regulated digital finance, increasing legal certainty, and maintaining a proportionate supervisory framework. The ABBL specifically supports the role of regulated stablecoins in cross-border payments, market liquidity, and corporate treasury.

In a related development regarding digital asset maturity, the International Swaps and Derivatives Association (ISDA) has released a paper assessing tokenized money market funds (TMMFs) as eligible collateral. The paper explores how distributed ledger technology can address inefficiencies in collateral management by combining the liquidity of traditional money market funds with the operational efficiency of digital assets. ISDA is seeking market feedback on standardizing documentation to facilitate the use of TMMF shares in financial market transactions and derivatives.