Global financial market infrastructure and services providers DTCC, Clearstream and Euroclear, which specialise in clearing, settlements and custody of securities, in collaboration with Boston Consulting Group, unveiled a comprehensive blueprint for establishing an industry-wide digital asset ecosystem. The paper, on Wednesday 29 May 2024, aims to promote the successful adoption of tokenisation and digital asset securities, excluding cryptocurrencies. The report projected a $16trn business opportunity by 2030 through the tokenisation of global illiquid assets.
Despite the significant potential, the report noted that institutional adoption had reached an inflection point, with firms continuing to innovate independently through small-scale initiatives that failed to prioritise broad ecosystem development.
Six key principles
To address these challenges, the paper outlined six key principles designed to serve as a roadmap for the industry. These principles included ensuring legal certainty, encouraging regulatory compliance, developing resilient and secure infrastructure, safeguarding customer assets, facilitating connectivity and interoperability, and striving for operational scalability.
Jens Hachmeister, managing director and head of issuer services and new digital markets at Clearstream, the potential of new technologies to enhance efficiency, speed, and safety in financial markets. Hachmeister called for industry-wide collaboration and unified standards to overcome current challenges and facilitate the seamless integration of digital assets into the global financial ecosystem.
Nadine Chakar, managing director and global head of DTCC digital assets, highlighted the need for the industry to pivot towards demonstrating tangible results and value generation. Chakar emphasised the unique opportunity to transform the financial system through collaboration across a broad spectrum of firms, building the necessary infrastructure, standards, controls and governance to underpin digital markets.
Philippe Laurensy, managing director and head of product, strategy and innovation at Euroclear, echoed these sentiments, stating that the collaboration aimed to create innovative solutions to meet the evolving needs of customers and drive industry advancements. Laurensy highlighted how tokenisation could offer clients flexibility in creating space on their balance sheets, leading to new business opportunities.
The partnership between DTCC, Clearstream and Euroclear leveraged decades of shared experience in providing infrastructure for global capital markets, a vast network of client relationships and a strong track record of supporting market evolution. This latest paper built upon previous efforts by the financial market infrastructures to galvanise market participants globally on establishing a digital asset ecosystem, following the of a whitepaper titled “Advancing the digital asset era, together” in September 2023.
In addition to the six core principles, the paper presented a set of risk management controls to mitigate risks such as asset mismanagement or insufficient controls to govern smart contracts. Recommended controls included defining access to smart contracts and maintaining a comprehensive record of digital asset events and transactions.
BCG’s collaboration included an analysis of approximately 100 regulations and whitepapers across multiple jurisdictions and over 20 interviews with key market participants and technology vendors.