Distributed ledger technology is working fine, and the fundamental idea of stakeholders sharing views of the same “golden copy” of a security and its transaction history is terrific. Still, while certain areas of issuance have seen something of a breakthrough, the main financial markets remain untouched. A Thursday panel of the Optic conference sought to map out the path forward.
Sabih Behzad, Managing Director, Head of Digital Assets & Currencies Transformation, Deutsche Bank, managed the panel with
Benjamin Duve, Senior Lead Market Infrastructure Expert, European Central Bank,
Christoph Hock, Head Tokenisation & Digital Assets, Union Investment,
Georgina K. Lok, Head of Market Development, Hong Kong Monetary Authority
John O’Neill, Managing Director Global Head of Digital Assets Strategy, HSBC, and
Philippe Laurensy, Head of Group Strategy, Product Management and Innovation, Euroclear.
From their different sides as banks, investors, infrastructres and central banks, their institutions are all among the curious frontrunners of established institutions who have taken part in DLT initiatives. Even so, they could conclude that progress has not been fast, and that evident advantages over the traditional ecosystem still have to materialise.
To sort the many remaining question marks, the ECB’s Benjamin Duve lined out two themes. One covers the nature of the assets in terms of whether a blockchain technically holds them or just represents them. These theme also includes the risk of standard fragmentation and exposure to the various operators. Issuers seek the full market of investors, not just small pools of who happens to be connected to a specific DLT platform. The second theme centres around central bank digital currencies, CBDCs. While it is central that central banks supply these, it also needs to be ensured that the supply does not disrupt what already works.
The yearly Optic conference, in London on 2–3 October 2024, is hosted by the Association for Financial Markets in Europe (AFME). Optic stands for the “Operations, post trade, technology and innovation conference”. PostTrade 360° is there, with our coverage collected here.
