Discussing the current state of settlement, safekeeping, standards, and regulation.
We’ll review progress towards true delivery of tokens against fiat currency payment with settlement finality; look at developments that can overcome the practical, technical, and legal challenges of safekeeping tokenized assets; assess the pioneering efforts to achieve interoperability between different token issuance, trading, and settlement platforms and between token platforms and traditional platforms and exchanges; and appraise jurisdictions which are in the vanguard of providing a settled legal, regulatory and infrastructural environment for tokenized digital assets.
Register for this webinar to join the discussion:
- How can the issue of central bank digital currencies (CBDCs) on tokenization platforms be encouraged and accelerated
- What are the operational pillars of secure and safe custody for security tokens?
- Is there a difference between the infrastructure for security tokens and native crypto tokens?
- What role does inter-operability play at this stage in the adoption process? Who is responsible for oversight and implementation?
- How can security token issuers, investors, and service providers best be provided with regulatory certainty?
- Will it take a governmental or regulatory intervention to initiate a transition from the current system to a tokenized future?
Incumbents in the securities services industry concluded last year that blockchain would not disrupt post-trade services after all. Yet the potential advantages of tokenizing equity and debt securities, especially in terms of operational, intermediation, and liquidity cost savings, remain compelling. And paths through the obstacles to progress are becoming clearer. Payment tokens and Stablecoins are filing the gaps at least until Central Bank Digital Currencies (CBDCs) finally solve the problem of on-chain (or on-network) settlement in multiple fiat currencies. Effective tools for safekeeping digital assets, and the orthodox financial assets that underpin some of them, are being designed. Work is underway to agree on the technical standards that will allow the tokenization platforms and established trading platforms to inter-operate. Governments are gradually publishing rulings and even laws which offer issuers of digital tokens and their investors the regulatory certainty they need.
The conventional view of the impact of blockchain technologies on the clearing and settlement of securities has shed the alarmist tone of 2016-2018. A string of blockchain proofs of concept and pilot tests that led nowhere – and delays and modifications to the one major industry project that did press ahead – have convinced industry insiders that their industry is safe from disruption. In their view, it is efficient enough already. Even where it is not, shifting off aging but complicated technology platforms are too risky and expensive to undertake. Blockchain might be relevant in some limited areas (such as collateral management) or applicable to other asset classes (such as commodities and real estate) but, runs the argument, less ambitious technologies such as robotic process automation (RPA) and data-crunching artificial intelligence and machine learning (ML) tools have more to offer the industry. The lasting legacy of the era of blockchain hype might, however, be something different – namely digital or tokenized assets listed and exchanged on platforms where transactions settle instantly between counterparties rather than via multiple intermediaries and the assets are safely kept in wallets secure from external threats of the kind that bedeviled the crypto-currency markets. The elements that will enable tokenized digital assets markets to take off – closed networks, scalable technologies, settlement finality, asset safety, regulatory certainty, and the standards that drive inter-operability – are being put in place. If issuers can be convinced security tokens will lower their cost of capital, and investors are persuaded that security tokens can increase their rate of return, there is every reason to believe that the global capital markets could be on the cusp of a series of far-reaching structural upheavals.