Nasdaq has confirmed that Vanguard and Wellington Management completed their first tokenized collateral test trades on Canton Network.
Nasdaq first disclosed the tests in July, when it referred to two unnamed asset managers. Its August 24 update identifies Vanguard and Wellington and explains how the trades were handled.
The collateral consisted of money market fund securities converted into digital tokens and issued on Canton. Nasdaq said each token represented a direct, legally enforceable interest in the underlying fund shares.
Nasdaq Calypso handled the surrounding work. It checked whether the tokens could be used as collateral, generated the usual margin calls and updated the records after settlement.
The firm providing the collateral sent the tokens from its Canton wallet to the receiving party’s wallet. Nasdaq said the transfer became final in real time. The collateral records were then updated automatically, with no manual intervention needed at settlement.
Before the trades, the parties amended their existing agreements so tokenized money market fund shares could be accepted as collateral. Nasdaq said the changes followed the approach recommended by the International Swaps and Derivatives Association.
