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Why Is Cross-Margining Complex for Derivatives across Different Asset Classes (E.g. FX and Crypto)?

Cross-margining relies on high correlation between the underlying assets to justify margin reduction. FX and crypto often exhibit low or unstable correlation, making the risk reduction difficult to quantify and model reliably.

Different regulatory frameworks and operational standards for each asset class also add complexity.

What Regulatory Hurdles Exist for Cross-Margining between Traditional Finance and Crypto Derivatives?
How Does the Treatment of a Crypto Asset as a Security versus a Commodity Affect Cross-Margining?
How Does the Correlation between Collateral and the Underlying Derivative Affect the Haircut?
What Is the Role of the Bank for International Settlements (BIS) in Setting Cross-Margining Standards?