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FMIs aim to drive tokenized asset acceptance
DTCC, Clearstream, Euroclear unveil plan for industry-wide ecosystem development
The Asset 31 May 2024

Three of the world’s largest financial market infrastructures (FMIs) – DTCC, Clearstream and Euroclear – in collaboration with Boston Consulting Group, have unveiled a blueprint for establishing an industry-wide digital asset ecosystem to drive acceptance of tokenized assets.

By 2030, the tokenization of global illiquid assets is projected to be a US$16 trillion business opportunity. However, progress on institutional adoption, according to the group, has reached an inflection point as firms continue innovating in silos, with small-scale initiatives that fail to progress or prioritize broad ecosystem development.

The blueprint, detailed in the Building the Digital Asset Ecosystem paper, looks to shift the industry’s focus by defining six principles to promote the successful adoption of tokenization and digital asset securities (excluding cryptocurrencies).

The six principles, which are also intended to serve as a roadmap for the industry to come together and develop comprehensive standards for the digital asset marketplace, are:

  • Legal certainty – ensuring operations comply with 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.

In addition to the six core principles, the paper also presents a list of controls to help firms mitigate risks, such as asset mismanagement or insufficient controls to govern smart contracts. Recommended controls include defining who can access smart contracts and maintaining a comprehensive record of digital asset events and transactions.

“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,” says Nadine Chakar, managing director, global head of DTCC Digital Assets. “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.”

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