BMO maps out 2026 launch for tokenized margin and collateral settlement
BMO plans to let institutional clients post margin and move collateral in real time, 24/7, using tokenized cash directly at CME Group via Google Cloud’s Universal Ledger.
According to Reuters, Bank of Montreal said it will roll out tokenized cash capabilities that let clients convert US dollars into a tokenized instrument for use in margined products at the CME Group exchange as global markets shift toward around‑the‑clock trading and settlement.
BMO said the move is aimed at clients that increasingly need round‑the‑clock infrastructure to meet margin calls and manage trading and settlement activity.
In a joint announcement dated, BMO, CME Group, and Google Cloud said BMO will be the first bank to offer CME Group’s tokenized cash solution on Google Cloud Universal Ledger, using CME Group’s permissioned network on that platform.
CME Group said its tokenized cash solution is designed for real‑time settlement for institutional participants, including margin, collateral, and settlement workflows.
BMO plans to offer tokenized cash as an institutional settlement instrument to regulated financial firms in capital markets and commercial banking in the second half of 2026, subject to regulatory approval.
Reuters said BMO believes tokenized cash enables near‑instant settlement, cuts delays and frees up capital faster, helping support more continuous financial market activity.
In the joint release, CME Group’s chief operating officer and global head of clearing, Suzanne Sprague, said that with markets moving toward 24/7 trading, the exchange aims to help clients manage collateral and margin costs.
She added that by working with BMO and Google Cloud to tokenize cash at CME Clearing, firms would be able to meet margin and settlement obligations in real time and free up capital held in traditional banking processes.
Derek Vernon, head, North American Treasury and Payment Solutions at BMO, said the bank expects clients to be able to move funds outside traditional banking hours, which he said should reduce funding gaps and some operational friction.
He also said that as the global ecosystem for stablecoins and tokenized deposits “continues to expand rapidly,” BMO views the capability as a step toward bringing regulated money movement into a programmable environment.
Beyond clearing use cases, Reuters reported that BMO is also launching tokenized deposits, which the bank said will allow clients to use money in the bank in digital form for payments, treasury movements and programmable cash applications.
In the announcement, BMO said tokenized deposits will allow traditional commercial bank funds to be used in digital form for general‑purpose B2B payments, treasury movements and programmable cash applications, and that the bank plans to expand institutional use cases for accessing tokenized cash through a bank‑anchored framework.
