Stablecoins are considered an ideal choice for real-time collateral management.

Source: Cointelegraph Original: “Stablecoins are seen as ideal for real-time collateral management”

Cryptocurrencies and stablecoins are increasingly recognized in the traditional finance (TradFi) sector because they can simplify payment processes and improve the efficiency of the existing financial system.

In finance, collateral management refers to the process of managing the underlying collateral that secures other financial transactions (such as loans or derivatives) to reduce credit risk and ensure the smooth execution of transactions.

According to a recent pilot study by DTCC Digital Assets, digital assets such as stablecoins are the “perfect” financial tools for real-time collateral management, indicating that digital assets, particularly stablecoins, can modernize and streamline this critical function.

Joseph Spiro, the Director of Digital Assets at DTCC, stated during the panel discussion at the 2025 Consensus conference: “Digital assets are indeed the perfect use case for collateral management, whether it be for uncleared derivatives, cleared derivatives, central counterparties, repos, or any other type of collateral.”

Due to strict requirements for locked collateral, collateral management requires complex manual processes, and this collateral can only be released to the appropriate parties within preset time intervals.

“All of this can be done better, faster, and more efficiently with digital assets and smart contracts,” Spiro said. He added: "All manual processing can be eliminated. ”

Dubbed the “Great Collateral Experiment,” the pilot comes at a time when U.S. policymakers are working to develop a clear regulatory framework for stablecoins.

On May 14, at least 60 leading cryptocurrency founders gathered in Washington, D.C. to support the “Guidance and Establishment of the American Stablecoin National Innovation Act” (GENIUS Act). The bill failed to gain enough support from Democrats on May 8.

The GENIUS Act aims to establish collateral guidelines for stablecoin issuers while requiring full compliance with anti-money laundering laws.

The bill stalled on May 8 due to a lack of support from key Democrats, some of whom expressed concerns that U.S. President Donald Trump might profit from digital assets through his cryptocurrency-related businesses.

According to Kyle Hauptman, Chairman of the National Credit Union Administration in the United States, incorporating stablecoins into loans backed by traditional fiat currency can further simplify the TradFi process.

Hauptman said in the same panel discussion that the programmability of stablecoins could make the loan repayment process more transparent and streamlined for all participants, and that it is currently a “clunky process of month-end settlement”, adding:

“Stablecoins and their programmability can make this process very easy.”

“We not only make it easier for credit unions to settle these matters, allowing you to handle smaller amounts, but borrowers should get better deals here because this thing now has some characteristics of large bond issuances. It is now liquid,” he said.

Another piece of legislation—the Stablecoin Transparency and Accountability Act (STABLE Act)—was passed by the House Financial Services Committee on April 2 with a vote of 32 to 17. The bill is awaiting arrangements for debate and a full vote in the House.

Related news: The Senate plans to pass the stablecoin bill next week, removing the language targeting Trump.