In a single, sixty-minute demonstration just a year ago, DTCC set out to answer a question the financial industry had been asking for years: Could blockchain and tokenization meaningfully improve the way collateral moves through the global financial system?
What unfolded during the Great Collateral Experiment was not a far-future outlook. Rather, it was a live, real-time demonstration of what is possible today. Assets moved on chain. Rules were enforced automatically. Settlement compressed from hours into seconds. And the long standing assumptions about how collateral must work were fundamentally challenged.
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One year later, the impact of the experiment continues to ripple across the industry. Reflecting on the experiment, Joe Spiro, Product Director at DTCC’s Digital Asset Solutions Group, and Tom Sullivan, Head of Digital Asset Solutions at DTCC shared the outcomes, lessons learned and insights into how blockchain and tokenization are transforming the future of collateral management.
“A roughly sixty-minute demonstration changed the conversation about what is possible versus what is reality in terms of on-chain digital collateral management,” Spiro said.
The Problem Worth Solving
To understand why the experiment mattered, it helps to understand the problem it addressed.
Global collateral management is a logistics challenge at massive scale. Every day, financial institutions move vast amounts of collateral across borders, time zones, custodians and counterparties to meet margin requirements, manage risk and satisfy regulatory obligations. These workflows rely on fragmented systems, manual reconciliations and delayed settlement cycles that offer limited real-time visibility.
For firms issuing margin calls, the process often involves sending instructions and waiting. Visibility into where collateral is, how it is moving and when it will arrive typically comes only after settlement is complete.
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Sullivan, who participated in the Great Collateral Experiment from the client side of the equation, pointed to a familiar pain point: moving collateral across geographies is often slower and more manual than the market would like. Before joining DTCC, Sullivan was Head of Business Development for Digital Assets at Société Générale, where he helped establish the firm as a leader in issuing, transacting and managing digital-native financial products registered on blockchain.
"It was just so compelling to think differently about how collateral management works… the effort that it takes, the time that it takes and traditional barriers in global workflows,” he said.
The industry has long understood these inefficiencies. What it lacked was a credible proof point showing that a better model could operate at the scale, complexity and rigor financial markets demand.
That was the challenge the Great Collateral Experiment set out to meet.
What Made the Experiment Different
The experiment’s impact came from its refusal to stay theoretical.
During the experiment, when collateral moved, it actually moved on chain. Assets were allocated to smart contracts that embedded eligibility rules, haircut calculations and minimum transfer amounts directly into the workflow. These were not simulations. They were live, verifiable transactions executed in real time.
Settlement timelines that typically stretch across hours were compressed into seconds. Just as importantly, visibility changed entirely. Blockchain rails provided immediate, shared insight into the status of collateral movements, eliminating the blind spots that have long defined traditional workflows.
“Today, if I issue a margin call, I don’t know when my counterparty sends collateral until I see it settle,” Sullivan said. “With blockchain rails, you see it immediately. It’s revolutionary.”
The experiment also addressed one of the most persistent challenges in financial markets: interoperability. Collateral does not exist in a single format or location. The pilot demonstrated that tokenized assets, digitally native instruments, stablecoins, tokenized money market funds and even Bitcoin could operate within a unified framework, without forcing firms to abandon existing infrastructure.
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That ability to bring assets from anywhere, regardless of form, into a single operational model proved to be one of the experiment’s most consequential achievements.
A Market-Wide Effort
The Great Collateral Experiment was not conducted in isolation. DTCC convened a group of global institutions including JSCC, BNY Mellon, Euroclear, Franklin Templeton, Société Générale, Fnality and Wellington to participate in the pilot. The collaboration was intentional and central to the experiment’s credibility.
DTCC’s role as a neutral market infrastructure provider made it uniquely positioned to bring competitors and partners together around shared standards and common rails.
“DTCC serves as the neutral party to help create standards, build the rails and help define what good looks like for the future of financial workflows,” Sullivan noted. “That neutrality matters. When infrastructure is built to serve the market rather than a single firm, adoption becomes possible at scale.”
The industry’s response reflected that trust. The experiment’s replay footage was viewed widely across the global financial community, and in the months that followed, conversations shifted noticeably. The question was no longer whether this technology could work. It was how DTCC had done it so quickly, and what comes next.
Compressing Time, Reducing Risk
One of the experiment’s most tangible outcomes was its demonstration of what happens when time is compressed in collateral workflows.
Traditional processes can span multiple hours or even a full business day as instructions move through intermediaries and across time zones. During the experiment, DTCC achieved in roughly one hour what would typically take all day.
This compression is more than an operational improvement. It is a risk management breakthrough. The longer collateral is in transit or in limbo, the longer firms are exposed to market volatility, counterparty risk and settlement uncertainty. Faster movement reduces that exposure by design.
Industry studies suggest that tokenization-driven collateral infrastructure could unlock major capital efficiency gains. The experiment made clear why. The hidden costs of delay, fragmentation and opacity are significant; and they compound at scale.
What Comes Next
The Great Collateral Experiment was never intended to remain a showcase. It was designed as a bridge from concept to production. Later this year, DTCC will launch the tokenization service and also the Collateral AppChain as real, production-ready solutions.
The production systems will expand the range of supported assets and deliver instantaneous settlement with seamless mobility across time zones. Multi-chain interoperability will be foundational, allowing the infrastructure to connect with a diverse and evolving blockchain landscape as firms continue to innovate.
The momentum behind this work is already tangible. Some of the world’s largest financial institutions are actively exploring adoption, drawn by the promise of efficiency, transparency and reduced risk.
To learn more about DTCC’s digital asset solutions and the evolution of collateral management infrastructure, visit Digital Assets Collateral AppChain.