A report from the International Capital Markets Association has said distributed ledger technology is unlikely to replace central clearing or central‑limit order books in the repo market. Yet it argues the technology is now positioned to deliver meaningful efficiency gains in settlement, collateral mobility and intraday liquidity.
In the first part of a two‑volume study on DLT repo, the authors conclude that while the legal and functional nature of repo is unchanged by tokenisation, DLT is set to “transform the infrastructure of the repo and other financial markets” by enhancing or replacing existing post‑trade systems.
The report highlights settlement and collateral management as the areas where DLT can deliver the earliest benefits, citing the potential for “near‑instantaneous or event‑driven and fully‑automated” processes that reduce delays, errors and operational risk.
The report catalogues 34 publicised DLT repo tests and transactions between 2017 and 2025, noting that most were proofs‑of‑concept, pilots or simulations. Only two platforms — Broadridge’s DLR and JP Morgan’s Kinexys — have seen regular commercial use. ICMA says what is often described as a DLT repo market was, by the end of 2025, “almost entirely composed of these two distinct and isolated pools of activity”.
Turnover on DLR accelerated sharply in the second half of 2025, driven by sponsored repo flows from European banks. Kinexys reported $2bn in daily turnover in April 2025, with its joint venture with HQLAX initially adding up to $1bn a day. The authors infer that average daily turnover on Kinexys since mid‑2023 has been around $3.7bn, consistent with the platform’s reported cumulative volumes.
By contrast, the cumulative turnover of all other DLT repo activity over the nine‑year period — excluding DLR and Kinexys — is unlikely to have exceeded $300m, with much of it experimental or involving simulated settlement.
The report’s analysis of market‑structure functions concludes that central limit orderbooks trading and central clearing are inherently unsuitable for DLT, with decentralised alternatives to CCPs facing “fundamental legal objections”. As a result, the report finds that DLT’s impact will be concentrated in OTC trading and post‑trade processing rather than in the core matching and clearing functions of the repo market.
Despite these limits, the authors take a constructive view of the technology’s trajectory, pointing to the potential for DLT to support new use‑cases such as intraday repo, more efficient mobilisation of collateral across fragmented balance sheets, and integrated trading‑settlement workflows. It also notes that DLT‑based trading venues are feasible and already emerging in regulatory sandboxes.
“There is little doubt that DLT will transform the infrastructure of the repo and other financial markets,” the report says, even if the horizon for full‑scale adoption “is still some way off”.
Part two of the study, due in the summer, will examine how a DLT‑based settlement architecture could evolve and how far it may reshape the repo market’s underlying plumbing.
The lead author of the study is Richard Comotto, with support from Andy Hill, Gabriel Callsen, and Oliver Tinkler, all ICMA staff.
The full report can be found here.
