Cross-border repo refers to repurchase agreements involving the exchange of securities for cash across national jurisdictions. In the context of digital assets, this involves using tokenized securities or stablecoins as collateral for short-term borrowing between entities in different countries. It provides a mechanism for efficient liquidity management and collateral optimization across global markets. This financial instrument helps bridge traditional and digital asset systems.
Context
The development of cross-border repo markets using distributed ledger technology (DLT) is a significant area of focus for central banks and financial institutions. Regulatory harmonization across jurisdictions presents a considerable challenge for widespread adoption. Pilot programs and collaborative efforts aim to establish standardized legal frameworks and operational protocols for these transactions.
Tokenizing MMF shares on DLT enables T+0 cross-border collateral mobility, unlocking capital efficiency and mitigating counterparty settlement risk across the global treasury function.
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