While everyone knows that digital securities are the future, the path to shift from the analog past to the digital asset future has been a circuitous path. Today, DTCC, Euroclear, and Clearstreem have announced they are working with the Boston Consulting Group to produce a “blueprint” for the global digital asset ecosystem.
The document, titled Advancing the Digital Asset Era, Together, is said to involve reviewing approximately 100 regulations and whitepapers across multiple jurisdictions and over 20 interviews with various market participants and technology vendors.
The report states:
“Years of smaller-scale deployments have in part resulted in sub-scale, isolated pools of instrument liquidity on proprietary DLTs, which now form obstacles to further industry growth. With a small number of DLT protocols today handling significant, consolidated trading volumes, the fragmentation of digital liquidity and immobility of tokenized value could create barriers, leaving digital assets more costly to maintain and transfer than their traditional counterparts in the short term. Yet, in the medium- and long-term, there are significant opportunities for which the foundations have begun to be laid.”
Financial market infrastructure (FMIs) firms must work together to support the transition to digital assets.
Nadine Chakar, Managing Director and Global Head of DTCC Digital Assets, says that while many firms see potential in blockchain technology, including less risk and lower costs, the financial services industry still needs to pivot to distributed ledger technology.
“We have a unique opportunity to transform the financial system, but it will require collaboration across a wide cross-section of firms to build the infrastructure, standards, controls, and governance to underpin digital markets. We are proud to lead this conversation and will use this paper as a springboard to build consensus and drive efforts forward,” explained Chakar.
The aforementioned blueprint is said to include the following six principles:
- Legal Certainty – ensuring operations comply with the law,
- Regulatory Compliance – encouraging alignment with regulatory frameworks,
- Resilience and Security – developing robust infrastructure capable of resisting disruptions while protecting sensitive data,
- Safeguarding Customer Assets – implementing governance via smart contracts to manage assets securely,
- Connectivity and Interoperability – facilitating transactions and flexible settlements across diverse networks,
- Operational Scalability – striving for efficiency and cost-effectiveness through standardization.
The partners anticipate that by 2030 global illiquid assets will be a $16 trillion opportunity to become digital assets. While the opportunity is there, innovation and adoption remains fragmented.
Clearstream Managing Director, Head of Issuer Services & New Digital Markets Jens Hachmeister says industry wide collaboration is needed to advance an shared ecosystem. “We are developing the foundation for future digital markets for the benefit of our clients and all market participants,” says Hachmeister.
The report is available here.
