A collateral pawn refers to an asset that is used as security or collateral for a loan or debt. In this case, the asset (often something of value, like property, jewelry, or other goods) is pledged as a guarantee for repayment. If the borrower fails to repay the loan, the lender has the right to seize and sell the collateral pawn in order to recover the owed amount. The term "pawn" here is similar to how pawn shops operate. In a collateral pawn situation, you give an item to the lender as a form of guarantee, and if you can't repay the loan, they can keep or sell that item. However, the term "collateral pawn" can also be used more broadly to describe any pledged asset in financial transactions.