Tokenised cross?border repo: Where efficiency peaks 鈥� and where it fails
15 September 2026
Tokenisation is accelerating cross?border repo into atomic settlement, stripping out long?standing operational lag and exposing a US$1.3 trillion offshore segment to new liquidity dynamics. Theodore Law investigates whether eliminating settlement delay strengthens stability or amplifies liquidity stress when volatility hits
Image: stock.adobe.com/flashmovie
Cross?border repo鈥檚 accelerating settlement shift
Cross?border repo has always been shaped by fragmentation. Cash and securities move through different legal regimes, liquidity pools, and settlement infrastructures, each with its own cut?offs and sequencing rules. These divides cause friction, but they also create buffers.
Distributed ledger technology (DLT) compresses that time. As tokenised settlement accelerates, the market loses the operational lag that once cushioned cross?border flows.
The shift is not simply about removing friction. It reconfigures the timing of liquidity, collateral, and risk.
For L茅andre Moreno, head of tokenised assets strategy at Murex, the vulnerability is no longer transaction failure but timing friction. Cross?border repo, he argues, is increasingly 鈥渁 collateral mobility problem disguised as a settlement problem鈥�. The challenge is ensuring that cash and securities can be deployed 鈥渨here they need to be, when they need to be there鈥�.
Broadridge鈥檚 head of securities finance solutions, Darren Crowther, notes that cross?border repo introduces 鈥渕any more points of dependency鈥� than domestic activity. Different currencies, legal regimes, custodians, settlement systems, and market cut?offs all increase the potential for friction.
The anatomy of the offshore blind spot
The scale of offshore repo highlights the stakes. Data from the Office of Financial Research shows that US$1.3 trillion of non?centrally cleared bilateral repo transactions are denominated in foreign currencies rather than US dollars.
Within traditional settlement cycles, these multi?day chains often leave collateral in transit. That obscures leverage, clouds risk ownership, and weakens visibility across institutions.
Tokenised delivery?versus?payment (DvP) platforms 鈥� including Broadridge鈥檚 DLT and UBS鈥檚 tokenised collateral initiatives 鈥� aim to mobilise collateral across jurisdictions within minutes. But synchronised DvP becomes significantly harder when transactions touch multiple legacy networks, each with its own sequencing rules and settlement windows.
Crowther cautions that the US$1.3 trillion figure should not be read as direct settlement exposure. Instead, it reflects 鈥渢he scale of foreign?currency dependency embedded in bilateral repo activity鈥�. Stress can move quickly across currencies, funding markets, and jurisdictions when liquidity tightens.
Euroclear UK and International鈥檚 deputy chief business officer, Kate Lowe, identifies collateral fragmentation as the single biggest operational obstacle. Collateral is often held across different institutions, markets, systems, and jurisdictions. Moving it can involve reconciliation and manual intervention, leaving assets that could potentially provide liquidity relatively immobile.
Tokenisation offers a partial remedy as a shared record of the asset and its ownership can make collateral 鈥渧isible, controlled, and deployable across otherwise disconnected pools鈥�.
Sabine Farhat, head of securities finance at Murex, argues that the offshore blind spot is fundamentally an interconnectedness issue. Funding, liquidity, collateral, and FX exposures can no longer be managed in separate silos.
Danese echoes the point. 鈥淕enerally, the more complexity introduced into the settlement chain, the greater the potential for disruption.鈥�
In volatile conditions, a localised FX liquidity squeeze can rapidly cascade into a collateral bottleneck. Operational lag becomes systemic opacity.
This offshore blind spot is not simply a settlement delay; it represents a fundamental gap in market visibility.
Tokenisation and DLT in action: Where efficiency peaks
Atomic DvP synchronises cash and collateral movements, eliminating principal risk and collapsing multi?stage settlement chains into a single adjustable event.
The Bank for International Settlements鈥� (BIS) Project Agor谩 demonstrated that tokenised central bank reserves and tokenised commercial bank deposits can settle wholesale cross?border payments on an 鈥渁ll?or?nothing鈥� basis. Reconciliation burdens fall, manual intervention shrinks, and settlement becomes more predictable.
More than 40 private?sector institutions and seven major central banks participated. The testing proved that atomic settlement can operate at wholesale scale while preserving central bank control over national currencies.
The implications for repo are significant. Traditional cross?border repo relies on sequential settlement 鈥� cash, securities, FX, and collateral movements occurring across different infrastructures and time zones.
Tokenisation compresses these steps. Smart contracts can embed conditional triggers, automate lifecycle events, and synchronise cash and securities legs without relying on batch processing or end?of?day cut?offs.
Moreno argues that tokenisation does not change the economics of repo, but the operating model. 鈥淭he real innovation is not faster settlement 鈥� it is faster collateral mobility,鈥� he comments.
Tom Pikett, executive director at DTCC Digital Assets, agrees that mobility is the true value driver. Speed, he argues, 鈥渕atters, but as an enabler鈥�. As tokenisation matures, he believes the greatest efficiency gains will come from allowing the same pool of high?quality collateral to move seamlessly between financing, margin, and liquidity uses.
Faster mobility means collateral can be redeployed intraday rather than overnight. Inactive buffers decrease and liquidity management becomes more dynamic.
Danese sees the same opportunity and states that tokenisation can 鈥渋mprove interoperability, minimise settlement risk, and accelerate collateral mobility鈥�. Canton鈥檚 architecture, he notes, is designed so that 鈥渘ative interoperability sits at its core鈥�.
The International Monetary Fund adds a broader perspective.
Tokenisation represents a structural reallocation of trust within financial markets as execution, settlement, and aspects of risk management shift from institution?specific processes to shared programmable infrastructures.
Temporal frictions 鈥� end?of?day settlement, batch processing, delayed reconciliation 鈥� collapse into continuous settlement cycles. Collateral can be mobilised in real time, but liquidity demands become more immediate.
Crowther agrees that atomic DvP can materially reduce principal risk and shorten timing gaps, but he stresses that settlement timing optionality remains important. 鈥淭he goal should be smarter settlement, not simply forcing every transaction into an atomic model,鈥� he says.
Fractionalisation could extend this further. Once tokenised sovereign debt can be split into granular units, collateral optimisation may reach its full potential.
Farhat notes that tokenised and traditional collateral must coexist within a unified inventory and risk?management framework. Moreno reinforces the point: 鈥淭he new competitive advantage is collateral mobility, not settlement efficiency.鈥�
Where tokenisation fails 鈥� and where it worsens stress
Tokenisation does not create new liquidity. It accelerates the velocity of existing pools.
If markets face a shortage of cash or high?quality liquid assets, DLT cannot bridge the gap. Moreno puts it plainly: atomic settlement 鈥渟olves timing risk, but does not solve liquidity risk鈥� and instead adds time pressure to it.
Danese highlights the structural hurdles preventing seamless cross?border atomic settlement. Technology may be 鈥渇it for purpose鈥�, but legal certainty, common token standards, and regulatory alignment remain incomplete.
Interoperability remains the hardest challenge. Tokenised collateral sits across multiple DLT networks, each with its own standards and legal frameworks. If these platforms cannot communicate, the market risks fracturing into digital silos.
Pikett warns that 鈥渢he future will be multi?chain and multi?network, but it cannot be multi?silo鈥�. If tokenised collateral can only move efficiently within a single ecosystem, he argues, the industry risks recreating today鈥檚 fragmentation in digital form rather than solving it.
Lowe emphasises that digital assets must connect with existing settlement arrangements, collateral management systems, and liquidity pools. Success, she argues, should be measured by whether liquidity improves, operational friction is reduced, and costs fall for participants.
Crowther notes that tokenisation relocates risk rather than eliminating it, by moving 鈥渢he focus towards legal certainty, interoperability, settlement finality, operational resilience, and the quality of the settlement asset.鈥�
Even if atomic settlement eliminates principal risk, legal friction can still delay collateral movement at critical moments.
Intraday liquidity: The new fault line
Tokenisation compresses settlement into near?real?time and liquidity management changes from an overnight cycle to a continuous one.
At the same time, the buffers that once absorbed operational delays disappear and liquidity risk moves into the trading day.
The BIS warns that accelerated settlement shortens the window to source funding and mobilise collateral, making intraday shortfalls more likely.
The ECB finds that liquidity usage rises when cash, securities, and FX flows must align without delay across multiple infrastructures.
Moreno says the shift is structural. The industry 鈥渒nows how to manage overnight risk鈥� but the next challenge is managing intraday risk.
Farhat agrees that the pressure moves upstream. Managing never?ending liquidity and risk becomes an operating?model problem rather than an infrastructure problem.
Danese adds that faster settlement must be distinguished from instantaneous settlement. If dealers were required to pre?fund or pre?lodge securities before transacting, liquidity provision could shrink.
Pikett stresses that the future should not be viewed through a binary lens of delayed versus instant settlement. Instead, programmable settlement should 鈥渃oordinate collateral and liquidity obligations at the appropriate time鈥�, using atomicity where it reduces risk while preserving netting, optimisation, partial settlement, and sequencing.
Crowther notes that atomic DvP removes principal risk but not liquidity, valuation, legal, or counterparty risk. The bigger opportunity, he argues, is 鈥渂uilding infrastructure that supports the right settlement model for each use case鈥�.
Institutions must mobilise collateral faster and respond to funding needs more frequently. Therefore, the challenge moves from collateral sufficiency to collateral accessibility.
A faster market with thinner shock absorbers
While tokenisation is frequently presented as a settlement innovation, its true paradigm shift lies in redefining collateral.
By converting static assets into real-time sources of liquidity, it paves the way for repo desks to evolve into continuous optimisation engines.
However, market participants urge a measured approach to this digital transition. Moreno summarises the structural landscape by explaining that 鈥渢okenisation does not remove risk鈥�, but instead 鈥渃hanges its location.鈥�
This sentiment is reinforced by Farhat, who highlights the operational reality that 鈥渁utomation must be governed, and efficiency cannot come at the expense of stability鈥�.
Furthermore, the relationship between speed and liquidity remains a critical variable. Danese cautions that shortening settlement cycles does not automatically create deeper markets, warning that accelerated settlement 鈥渃ould potentially come at the expense of market depth鈥�.
As cross-border repo enters an era of unprecedented velocity, the industry鈥檚 ultimate challenge is clear. The true test of success will not be speed alone, but the collective ability to build the robust governance, seamless interoperability, and dynamic intraday liquidity frameworks needed to ensure that faster markets do not become more fragile.
Cross?border repo has always been shaped by fragmentation. Cash and securities move through different legal regimes, liquidity pools, and settlement infrastructures, each with its own cut?offs and sequencing rules. These divides cause friction, but they also create buffers.
Distributed ledger technology (DLT) compresses that time. As tokenised settlement accelerates, the market loses the operational lag that once cushioned cross?border flows.
The shift is not simply about removing friction. It reconfigures the timing of liquidity, collateral, and risk.
For L茅andre Moreno, head of tokenised assets strategy at Murex, the vulnerability is no longer transaction failure but timing friction. Cross?border repo, he argues, is increasingly 鈥渁 collateral mobility problem disguised as a settlement problem鈥�. The challenge is ensuring that cash and securities can be deployed 鈥渨here they need to be, when they need to be there鈥�.
Broadridge鈥檚 head of securities finance solutions, Darren Crowther, notes that cross?border repo introduces 鈥渕any more points of dependency鈥� than domestic activity. Different currencies, legal regimes, custodians, settlement systems, and market cut?offs all increase the potential for friction.
The anatomy of the offshore blind spot
The scale of offshore repo highlights the stakes. Data from the Office of Financial Research shows that US$1.3 trillion of non?centrally cleared bilateral repo transactions are denominated in foreign currencies rather than US dollars.
Within traditional settlement cycles, these multi?day chains often leave collateral in transit. That obscures leverage, clouds risk ownership, and weakens visibility across institutions.
Tokenised delivery?versus?payment (DvP) platforms 鈥� including Broadridge鈥檚 DLT and UBS鈥檚 tokenised collateral initiatives 鈥� aim to mobilise collateral across jurisdictions within minutes. But synchronised DvP becomes significantly harder when transactions touch multiple legacy networks, each with its own sequencing rules and settlement windows.
Crowther cautions that the US$1.3 trillion figure should not be read as direct settlement exposure. Instead, it reflects 鈥渢he scale of foreign?currency dependency embedded in bilateral repo activity鈥�. Stress can move quickly across currencies, funding markets, and jurisdictions when liquidity tightens.
Euroclear UK and International鈥檚 deputy chief business officer, Kate Lowe, identifies collateral fragmentation as the single biggest operational obstacle. Collateral is often held across different institutions, markets, systems, and jurisdictions. Moving it can involve reconciliation and manual intervention, leaving assets that could potentially provide liquidity relatively immobile.
Tokenisation offers a partial remedy as a shared record of the asset and its ownership can make collateral 鈥渧isible, controlled, and deployable across otherwise disconnected pools鈥�.
Sabine Farhat, head of securities finance at Murex, argues that the offshore blind spot is fundamentally an interconnectedness issue. Funding, liquidity, collateral, and FX exposures can no longer be managed in separate silos.
Danese echoes the point. 鈥淕enerally, the more complexity introduced into the settlement chain, the greater the potential for disruption.鈥�
In volatile conditions, a localised FX liquidity squeeze can rapidly cascade into a collateral bottleneck. Operational lag becomes systemic opacity.
This offshore blind spot is not simply a settlement delay; it represents a fundamental gap in market visibility.
Tokenisation and DLT in action: Where efficiency peaks
Atomic DvP synchronises cash and collateral movements, eliminating principal risk and collapsing multi?stage settlement chains into a single adjustable event.
The Bank for International Settlements鈥� (BIS) Project Agor谩 demonstrated that tokenised central bank reserves and tokenised commercial bank deposits can settle wholesale cross?border payments on an 鈥渁ll?or?nothing鈥� basis. Reconciliation burdens fall, manual intervention shrinks, and settlement becomes more predictable.
More than 40 private?sector institutions and seven major central banks participated. The testing proved that atomic settlement can operate at wholesale scale while preserving central bank control over national currencies.
The implications for repo are significant. Traditional cross?border repo relies on sequential settlement 鈥� cash, securities, FX, and collateral movements occurring across different infrastructures and time zones.
Tokenisation compresses these steps. Smart contracts can embed conditional triggers, automate lifecycle events, and synchronise cash and securities legs without relying on batch processing or end?of?day cut?offs.
Moreno argues that tokenisation does not change the economics of repo, but the operating model. 鈥淭he real innovation is not faster settlement 鈥� it is faster collateral mobility,鈥� he comments.
Tom Pikett, executive director at DTCC Digital Assets, agrees that mobility is the true value driver. Speed, he argues, 鈥渕atters, but as an enabler鈥�. As tokenisation matures, he believes the greatest efficiency gains will come from allowing the same pool of high?quality collateral to move seamlessly between financing, margin, and liquidity uses.
Faster mobility means collateral can be redeployed intraday rather than overnight. Inactive buffers decrease and liquidity management becomes more dynamic.
Danese sees the same opportunity and states that tokenisation can 鈥渋mprove interoperability, minimise settlement risk, and accelerate collateral mobility鈥�. Canton鈥檚 architecture, he notes, is designed so that 鈥渘ative interoperability sits at its core鈥�.
The International Monetary Fund adds a broader perspective.
Tokenisation represents a structural reallocation of trust within financial markets as execution, settlement, and aspects of risk management shift from institution?specific processes to shared programmable infrastructures.
Temporal frictions 鈥� end?of?day settlement, batch processing, delayed reconciliation 鈥� collapse into continuous settlement cycles. Collateral can be mobilised in real time, but liquidity demands become more immediate.
Crowther agrees that atomic DvP can materially reduce principal risk and shorten timing gaps, but he stresses that settlement timing optionality remains important. 鈥淭he goal should be smarter settlement, not simply forcing every transaction into an atomic model,鈥� he says.
Fractionalisation could extend this further. Once tokenised sovereign debt can be split into granular units, collateral optimisation may reach its full potential.
Farhat notes that tokenised and traditional collateral must coexist within a unified inventory and risk?management framework. Moreno reinforces the point: 鈥淭he new competitive advantage is collateral mobility, not settlement efficiency.鈥�
Where tokenisation fails 鈥� and where it worsens stress
Tokenisation does not create new liquidity. It accelerates the velocity of existing pools.
If markets face a shortage of cash or high?quality liquid assets, DLT cannot bridge the gap. Moreno puts it plainly: atomic settlement 鈥渟olves timing risk, but does not solve liquidity risk鈥� and instead adds time pressure to it.
Danese highlights the structural hurdles preventing seamless cross?border atomic settlement. Technology may be 鈥渇it for purpose鈥�, but legal certainty, common token standards, and regulatory alignment remain incomplete.
Interoperability remains the hardest challenge. Tokenised collateral sits across multiple DLT networks, each with its own standards and legal frameworks. If these platforms cannot communicate, the market risks fracturing into digital silos.
Pikett warns that 鈥渢he future will be multi?chain and multi?network, but it cannot be multi?silo鈥�. If tokenised collateral can only move efficiently within a single ecosystem, he argues, the industry risks recreating today鈥檚 fragmentation in digital form rather than solving it.
Lowe emphasises that digital assets must connect with existing settlement arrangements, collateral management systems, and liquidity pools. Success, she argues, should be measured by whether liquidity improves, operational friction is reduced, and costs fall for participants.
Crowther notes that tokenisation relocates risk rather than eliminating it, by moving 鈥渢he focus towards legal certainty, interoperability, settlement finality, operational resilience, and the quality of the settlement asset.鈥�
Even if atomic settlement eliminates principal risk, legal friction can still delay collateral movement at critical moments.
Intraday liquidity: The new fault line
Tokenisation compresses settlement into near?real?time and liquidity management changes from an overnight cycle to a continuous one.
At the same time, the buffers that once absorbed operational delays disappear and liquidity risk moves into the trading day.
The BIS warns that accelerated settlement shortens the window to source funding and mobilise collateral, making intraday shortfalls more likely.
The ECB finds that liquidity usage rises when cash, securities, and FX flows must align without delay across multiple infrastructures.
Moreno says the shift is structural. The industry 鈥渒nows how to manage overnight risk鈥� but the next challenge is managing intraday risk.
Farhat agrees that the pressure moves upstream. Managing never?ending liquidity and risk becomes an operating?model problem rather than an infrastructure problem.
Danese adds that faster settlement must be distinguished from instantaneous settlement. If dealers were required to pre?fund or pre?lodge securities before transacting, liquidity provision could shrink.
Pikett stresses that the future should not be viewed through a binary lens of delayed versus instant settlement. Instead, programmable settlement should 鈥渃oordinate collateral and liquidity obligations at the appropriate time鈥�, using atomicity where it reduces risk while preserving netting, optimisation, partial settlement, and sequencing.
Crowther notes that atomic DvP removes principal risk but not liquidity, valuation, legal, or counterparty risk. The bigger opportunity, he argues, is 鈥渂uilding infrastructure that supports the right settlement model for each use case鈥�.
Institutions must mobilise collateral faster and respond to funding needs more frequently. Therefore, the challenge moves from collateral sufficiency to collateral accessibility.
A faster market with thinner shock absorbers
While tokenisation is frequently presented as a settlement innovation, its true paradigm shift lies in redefining collateral.
By converting static assets into real-time sources of liquidity, it paves the way for repo desks to evolve into continuous optimisation engines.
However, market participants urge a measured approach to this digital transition. Moreno summarises the structural landscape by explaining that 鈥渢okenisation does not remove risk鈥�, but instead 鈥渃hanges its location.鈥�
This sentiment is reinforced by Farhat, who highlights the operational reality that 鈥渁utomation must be governed, and efficiency cannot come at the expense of stability鈥�.
Furthermore, the relationship between speed and liquidity remains a critical variable. Danese cautions that shortening settlement cycles does not automatically create deeper markets, warning that accelerated settlement 鈥渃ould potentially come at the expense of market depth鈥�.
As cross-border repo enters an era of unprecedented velocity, the industry鈥檚 ultimate challenge is clear. The true test of success will not be speed alone, but the collective ability to build the robust governance, seamless interoperability, and dynamic intraday liquidity frameworks needed to ensure that faster markets do not become more fragile.
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