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Three well-known financial market infrastructures (FMIs) – DTCC,
Clearstream, and Euroclear – along with Boston Consulting Group (BCG), have
revealed a blueprint aimed at establishing an industry-wide digital asset
ecosystem to foster the acceptance of tokenized assets.
Projected to reach a $16 trillion business opportunity by
2030, the tokenization of global illiquid assets has garnered significant
attention. However, institutional adoption has faced challenges due to
fragmented innovation and small-scale initiatives lacking broader ecosystem
development.
Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets, Source: LinkedIn
The jointly released paper, titled “Building the
Digital Asset Ecosystem,” endeavours to redirect industry focus by
outlining six principles intended to facilitate successful adoption of
tokenization and digital asset securities, excluding cryptocurrencies.
These principles encompass legal certainty, regulatory
compliance, resilience and security, safeguarding customer assets, connectivity
and interoperability, and operational scalability.
“While many firms recognize that blockchain
holds enormous promise to deliver cost savings, capital efficiencies and
reduced risk, the industry needs to pivot and demonstrate tangible results and
value generation,” said Nadine Chakar, Managing Director, Global Head of DTCC
Digital Assets.
Collaborative Standards and Risk Mitigation
The aim of these principles is to provide a roadmap for the
industry to collaborate and establish comprehensive standards for the digital
asset marketplace. Alongside these principles, the paper also introduces a
range of risk management controls to aid firms in mitigating potential risks
associated with digital assets, such as asset mismanagement and governance of
smart contracts.
Philippe Laurensy, MD and Head of Product, Strategy & Innovation, Euroclear, Source: LinkedIn
“New technologies bear immense potential to
bring financial markets to the next level of efficiency, speed and safety,”
said Jens Hachmeister, Managing Director, Head of Issuer Services & New
Digital Markets at Clearstream.
BCG conducted an analysis as part of this initiative, which
involved reviewing approximately 100 regulations and whitepapers across various
jurisdictions, as well as conducting over 20 interviews with key market
participants and technology vendors.
Philippe Laurensy, Managing Director and Head of Product,
Strategy & Innovation, Euroclear, commented: “Our objective is to create innovative
solutions that will address the evolving needs of our customers and drive
industry advancements which includes clients having the flexibility to create
space on their balance sheets through tokenisation, therefore leading to new
business opportunities.”
Three well-known financial market infrastructures (FMIs) – DTCC,
Clearstream, and Euroclear – along with Boston Consulting Group (BCG), have
revealed a blueprint aimed at establishing an industry-wide digital asset
ecosystem to foster the acceptance of tokenized assets.
Projected to reach a $16 trillion business opportunity by
2030, the tokenization of global illiquid assets has garnered significant
attention. However, institutional adoption has faced challenges due to
fragmented innovation and small-scale initiatives lacking broader ecosystem
development.
Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets, Source: LinkedIn
The jointly released paper, titled “Building the
Digital Asset Ecosystem,” endeavours to redirect industry focus by
outlining six principles intended to facilitate successful adoption of
tokenization and digital asset securities, excluding cryptocurrencies.
These principles encompass legal certainty, regulatory
compliance, resilience and security, safeguarding customer assets, connectivity
and interoperability, and operational scalability.
“While many firms recognize that blockchain
holds enormous promise to deliver cost savings, capital efficiencies and
reduced risk, the industry needs to pivot and demonstrate tangible results and
value generation,” said Nadine Chakar, Managing Director, Global Head of DTCC
Digital Assets.
Collaborative Standards and Risk Mitigation
The aim of these principles is to provide a roadmap for the
industry to collaborate and establish comprehensive standards for the digital
asset marketplace. Alongside these principles, the paper also introduces a
range of risk management controls to aid firms in mitigating potential risks
associated with digital assets, such as asset mismanagement and governance of
smart contracts.
Philippe Laurensy, MD and Head of Product, Strategy & Innovation, Euroclear, Source: LinkedIn
“New technologies bear immense potential to
bring financial markets to the next level of efficiency, speed and safety,”
said Jens Hachmeister, Managing Director, Head of Issuer Services & New
Digital Markets at Clearstream.
BCG conducted an analysis as part of this initiative, which
involved reviewing approximately 100 regulations and whitepapers across various
jurisdictions, as well as conducting over 20 interviews with key market
participants and technology vendors.
Philippe Laurensy, Managing Director and Head of Product,
Strategy & Innovation, Euroclear, commented: “Our objective is to create innovative
solutions that will address the evolving needs of our customers and drive
industry advancements which includes clients having the flexibility to create
space on their balance sheets through tokenisation, therefore leading to new
business opportunities.”
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