Citi and DTCC Say Tech Is Ready for Tokenization—Regulators Aren’t

Tokenizing collateral and moving it instantly across borders is no longer a concept — it’s a reality, but according to executives from Citi, DTCC, and Taurus, regulation has not yet caught up with the technology. 

Speaking at Chainlink’s SmartCon 2025 conference in New York on Wednesday, they warned that while blockchain infrastructure is ready, the legal and regulatory frameworks needed to support it are still fragmented.

Citi Token Services Goes Live Across Multiple Markets

Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said the bank’s tokenized cash system, known as Citi Token Services, is already live in the U.S., U.K., Hong Kong, and Singapore. The platform is reportedly moving billions in real client transactions, facilitating everything from supply chain payments to capital markets settlements.

“It’s not used off hours or weekends and holidays, which I think is really powerful,” Rugg said. “We’re actually seeing them use it on a regular basis, which is wonderful.”

However, expanding the system remains a challenge. Rugg explained that Citi needs regulatory approval in every jurisdiction it operates, and the lack of harmonized global standards has slowed down progress. 

She added that Citi ultimately wants to create a frictionless, multi-bank, multi-asset network — something as seamless as email — but the rules aren’t there yet.

DTCC Warns of Trust and Legal Gaps

Nadine Chakar, global head of digital assets at DTCC, echoed Rugg’s concerns. She cited the company’s recent “Great Collateral Experiment,” which showed that tokenized treasuries, equities, and money market funds could be used as collateral across different time zones, even in trades involving crypto assets.

But the most important takeaway wasn’t about the tech. Technology isn’t the barrier anymore: market trust and legal enforceability are, Chakar said.

She also cautioned that interoperability — a favorite buzzword in the industry — remains more theory than practice. “We throw around this word interoperability quite freely and loosely,” she said. “But what does it really mean? Does it really work in practice? The answer is, no, it doesn’t.”

The Push for Common Standards

The interoperability issue stems from the fact that most firms have built their own tokenization systems with different assumptions, legal frameworks, and smart contract designs. 

To address that, DTCC is now working with global clearinghouses and networks like SWIFT to establish shared protocols — not shared technology, but shared standards and language.

Lamine Brahimi, co-founder of Taurus, urged U.S. institutions to follow Switzerland’s example, where national frameworks for tokenized assets already exist. Without such coordination, he warned, financial firms risk fragmentation, security vulnerabilities, and costly compliance mismatches.

Regulatory Catch-Up Needed

The panel agreed that the industry’s evolution will likely be gradual. In the near term, wallet-based infrastructure could complement existing account-based systems, with wallets potentially becoming the new standard over time. 

But even as the rails are built, the “train” can’t move without updated regulation.

“It’s the nature of [digital assets] that just operates 24/7. It can go anywhere it wants to,” Chakar said. “Our rules and laws … they’re very local in nature, right? The problem now is, when we do issue a token, it could go anywhere.”