2026 Predictions: Collateral management – from friction to flow

This is an excerpt from our latest report: Zodia Custody 2026 predictions. Download the full report now to find out what next year holds for institutional digital asset custody.

Why now?

Regulatory clarity is creating confidence
The convergence of global frameworks is transforming how banks and asset managers engage with tokenised instruments. The Basel Committee’s 2024 guidance on crypto-asset exposures paved the way for banks to hold tokenised assets under defined capital treatment.

In the Middle East, the ADGM and DIFC are pioneering frameworks that explicitly recognise tokenised assets as eligible collateral.

In the US, a more open policy stance is fuelling renewed regulator and institutional engagement with blockchain-based collateral.

Across Europe and the UK, MiCA’s harmonised regime and the UK’s ongoing inclusion of crypto assets and crypto asset services within the regulatory perimeter are embedding digital collateral into mainstream treasury and risk systems.

Together, these developments mark a global inflection point, as digital assets are moving from experimentation to integration in regulated financial workflows.

Client demand is accelerating the shift
Hedge funds, asset managers, and corporates are seeking intraday liquidity and margin efficiency across fragmented markets. According to Coalition Greenwich, 68% of institutional investors expect digital assets to play a role in collateral workflows by 2026.

Programmable smart contracts, composable collateral pools, and early DeFi-based repo products are enabling automation, reuse, and cross-venue mobility of collateral once locked in legacy systems.

Technology is the final unlock
Tokenised money-market funds, real-time settlement networks, and interoperable custody infrastructure now allow assets to move securely and instantly across chains and venues.

While collateral flows remain partly bilateral and fragmented, advances in on-chain attestations, collateral analytics, and smart-contract automation are closing the gap – shifting operational risk from static processes to dynamic, cross-network execution.

Institutional impact

• Capital deployment: Digital-asset collateral enables real-time margining, automated eligibility checks, and frictionless cross-venue transfers replacing manual, delayed, siloed processes.
• Risk & compliance: Institutions must demonstrate continuous proof of ownership, location, and control of collateral. Segregation, rehypothecation limits, and auditability will become mandatory.
• Liquidity optimisation: Dynamic, tokenised collateral can reduce haircuts, improve capital ratios, and release previously idle assets, potentially unlocking trillions in trapped liquidity.
• Operational integration: Treasury, risk, and collateral teams will converge on unified, API-driven systems, blending traditional and digital asset operations into a single capital-management workflow.

The result: collateral management evolves from a cost centre into a strategic liquidity engine for institutions.

“Collateral is the quiet force that powers capital markets, and digital assets are rewriting its playbook. As controls, regulation, and confidence mature, what started as cautious experimentation will become systemic change. Slowly, then suddenly.”

Steven Taylor, Strategic Product Development

Zodia in action

Zodia Custody is building the trusted infrastructure that makes digital-asset collateral safe, scalable, and institution-ready.

• Secure, flexible custody: Customisable wallet configurations (segregated, unified, or policy-driven) give clients control and full auditability across jurisdictions.
• Real-time collateral mobility: Assets held under custody can be deployed instantly across venues, chains, and counterparties to support intraday liquidity, margining, and treasury optimisation.
• Interoperability across fragmented markets: Zodia’s orchestration layer, Interchange, connects custody, trading, and settlement endpoints to enable seamless collateral flows across bilateral rails, centralised venues, and emerging DeFi protocols, reducing friction and enhancing capital efficiency.

Together, these capabilities position Zodia Custody as a trusted partner for institutions navigating the complexity of digital collateral, offering not just safekeeping, but orchestration, insight, technical knowledge and expertise, and execution across the full lifecycle of asset deployment.

What’s next:

• Expansion of partnerships with collateral and repo providers.
• Broader network of borrowers, lenders, and tokenised fund issuers.
• Integration of tokenised and traditional securities into exchange workflows.
• Growing adoption of digital collateral in derivatives and CCP-cleared markets.

 

This is an excerpt from our latest report: Zodia Custody 2026 predictions. Download the full report now to find out what next year holds for institutional digital asset custody.