[VIDEO] Faster, cheaper and less risky … the benefits of making securities digital on distributed ledgers makes Deutsche Börse issuer-services head Jens Hachmeister convinced that a complete infrastructure shift is the right way to go. On Wednesday, he spoke with PostTrade 360° Copenhagen.
As the format of music changed from physical objects to files and streams, not only did it make each copy nearly free to produce and distribute. It came to speed up the velocity of the whole industry and market.
Now, this is the trick that Jens Hachmeister – managing director of issuer services and new digital markets at Deutsche Börse – would like to see repeated in the securities universe. Distributed ledger technology (DLT), similar to that which underpins cryptocurrencies including bitcoin, offers a radically new, all-digital and potentially much more efficient way of settling securities trades, in comparison with legacy systems.
The Deutsche Börse group notably operates not only the German marketplaces but also Clearstream – including Germany’s CSD and a Luxembourg-based International CSD.
“The problem is that our current infrastructures are not made to handle this,” he says.
“This is a challenge but still, I believe it is a paradigm shift and propelling us to the next level of efficiency.”
Parallell tracks – possibly for long time
That said, he predicts that parallel infrastructures will be around for a long time – again, drawing on the analogy of music formats:
“Records are still around.”
In Germany, there is now regulatory clarity, he reports – which allows 80 percent of the ISINs to be digitised if desirable.
Overall, Jens Hachmeister still sees the need for a network operator when the new networks are put into play – despite the technical possibility of potentially self-driving “decentralised finance”. Regulators and investors “still want to know who to call”.
In the Copenhagen conference, Jens Hachmeister was interviewed by Alan Goodrich, regional sales manager of financial services technology provider ERI.
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