Source: CointelegraphCollateral management requires complicated manual processes due to stringent requirements for locked-up collateral that can only be released to the appropriate parties at pre-set intervals.“All of that can be accomplished better, faster, more efficiently through digital assets and smart contracts,” Spiro said, adding that “all the manual processing can go away.”Related: Top South Korean presidential hopefuls support legalizing Bitcoin ETFsThe pilot, dubbed the “Great Collateral Experiment,” comes as US policymakers work toward clear regulatory frameworks for stablecoins.
Digital assets like stablecoins are the “perfect” financial instrument for real-time collateral management, according to a recent pilot by DTCC Digital Assets, which suggests that digital assets, particularly stablecoins, could modernize and simplify this critical function.“Digital assets really are the perfect use case for collateral management, whether it be uncleared derivatives, clear derivatives, central counterparties, repo, or any other type of collateral,” said Joseph Spiro, product director at DTCC Digital Assets, during a panel at Consensus 2025.
Cryptocurrencies and stablecoins are gaining recognition in the traditional finance (TradFi) space for their ability to streamline payments and increase efficiency in existing financial systemsIn finance, collateral management refers to the process of managing the underlying collateral securing other financial transactions, such as loans or derivatives, to mitigate credit risks and ensure smooth transactions.
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Author / Journalist: Cointelegraph by Zoltan Vardai
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