DTCC Creates Sandbox to Accelerate Digital Assets

The Depository Trust & Clearing Corporation (DTCC) has joined the growing number of regulatory/innovation entities by launching a Fintech Sandbox to support the development of digital assets.

Just about everyone acknowledges that at some point, all securities will be digital—potentially enhanced with codable or “smart” features that can save money with automated management and usher in a new era of novel assets available for investors. The DTCC iteration of a “Digital Launchpad” aims to bring together tech providers, market participants, etc., to provide a path for the “scalable adoption of digital assets.”

Frank La Salla, DTCC President, CEO, and Director, says that as a regulated entity supporting global capital markets, DTCC is uniquely positioned to support the digital asset ecosystem.

DTCC points to current estimates of around $16 trillion of possible tokenized securities by 2030. At the same time, the firm notes that many siloed projects are in the works when it would be better to be more collaborative.

“We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach,” said Nadine Chakar, Global Head of DTCC Digital Assets. “The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”

DTCC also revealed the results of a proof-of-concept trial on the Digital Launchpad completed in partnership with the Japan Securities Clearing Corporation (JSCC), the clearinghouse of the Japan Exchange Group.

The project sought to show how counterparties could use tokenization to optimize the collateral management process for clearing members. In particular, it examined how margin calls and their associated processes could be automated, made more efficient and transparent for all participants using digital assets and smart contracts – or rules that automatically execute on a distributed ledger when certain conditions are met.

JSCC President & CEO Konuma Yasuyuki said that by working with the DTCC Digital Launchpad, they were able to demonstrate the issuance of digital assets without needing an in-house tech stack.

DTCC is asking others to review the results in Japan and consider doing the same.

 



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