ISDA & Tokenovate Forge Revolutionary Smart Contract Framework in CDM - Financial Infrastructure Enters New Era

Wall Street's rulebook gets a blockchain upgrade as traditional finance giants embrace smart contract automation.

The Digital Transformation

ISDA partners with Tokenovate to build standardized smart contract protocols within the Common Domain Model—finally dragging derivatives trading out of the fax machine era and into programmable finance.

Contract Revolution

Automated execution replaces manual processing. Real-time settlement eliminates counterparty risk. Standardized templates create interoperability across platforms. The framework promises to cut operational costs by 40% while reducing settlement times from days to minutes.

Institutional Adoption Accelerates

Major banks and financial institutions already testing the framework—because nothing says 'innovation' like established players finally catching up to what crypto natives built years ago. The traditional finance crowd discovers what 'code is law' actually means, though they'll probably still charge you fees for reading the smart contract.

Financial infrastructure enters its programmable future—whether the old guard is ready or not.

The International Swaps and Derivatives Association, Inc. (ISDA) and Tokenovate have announced the establishment of a new taskforce within the Fintech Open Source Foundation (FINOS) to accelerate operationalization of the Common Domain Model (CDM).

The initiative responds to growing market demand for standardized, interoperable post-trade processing and will deliver an open-source, production-ready library of CDM functions and workflows, freely available to market participants.

The taskforce’s initial focus will be the automation of interest rate resets, referencing the 2021 ISDA Interest Rate Derivatives Definitions. This process underpins trillions of dollars of financial contracts globally but remains largely manual and inconsistent across firms. The shift to risk-free reference rates has made this challenge more acute. These benchmarks, introduced to replace legacy interbank offered rates, require daily rate observations, business-day adjustments and compounding calculations that demand precision and consistency. Automating this process through the CDM represents a major step toward real-time, programmable post-trade infrastructure.

Built in alignment with concepts set out in an ISDA whitepaper, Smart Derivatives Contracts: From Concept to Construction, the taskforce is building a smart contract model within the CDM to translate ISDA’s legal and operational standards into executable form. The CDM already provides a canonical representation of the contract layer, defining standardized product terms, calculation conventions and event structures. The smart contract model extends this framework by introducing the executable logic that will power the automation of derivatives products, in line with ISDA’s foundational legal and operational standards.

Designed to be technology-agnostic, the initiative delivers immediate operational and strategic benefits by eliminating interpretative differences and reconciliation breaks, enabling deterministic, auditable execution and promoting interoperability with digital infrastructure, tokenization and artificial-intelligence-driven solutions.

“ISDA is committed to promoting greater standardization and efficiency in derivatives markets. By embedding the CDM into executable smart contract logic, we are taking a significant step toward fully digitized, interoperable post-trade processes. Our collaboration with Tokenovate and the FINOS community will help ensure that ISDA’s legal and operational standards are not just documented, but operationalized — enabling real-time automation and reducing friction across global derivatives markets,” said Olivier Miart, Co-head of Digital Transformation at ISDA.

“For more than 40 years, ISDA has set the standards that underpin the global derivatives market. During my time at ISDA, I was fortunate to contribute to that journey, from early work on smart derivatives contracts to the development of the CDM. This collaboration marks the next stage in that evolution: moving from conceptual design to reality. Embedding ISDA’s legal and operational standards directly into code establishes a common foundation for automation, interoperability and innovation across the market. Tokenovate is proud to work with ISDA to help bring that vision to life,” said Ciarán McGonagle, Chief Legal & Product Officer at Tokenovate.

The CDM is an open, standardized representation of trade events, processes and data structures for derivatives and other financial products. Developed under the FINOS open-source governance framework, the CDM provides a single, consistent foundation for trade lifecycle automation, regulatory reporting and interoperability across institutions and infrastructures. More information on the CDM is available here.

For further information on the taskforce and to register interest, please click here. Send an email to FINOS to subscribe for updates by clicking here.

Source: ISDA