Clearstream, DTCC, and Euroclear, three of the biggest central securities depositories (CSDs) and central counterparties (CCPs) globally, have joined forces with Boston Consulting Group (BCG) to introduce a comprehensive digital assets framework. This framework aims to streamline the integration and effectiveness of digital securities in financial markets. BCG has forecasted that the digital assets sector could reach a remarkable $16 trillion by 2030, underscoring the substantial economic opportunities presented by this initiative.
The release of the new document, titled “Building the Digital Assets Ecosystem,” expands on a previous publication that addressed strategies to combat fragmentation in the digital securities industry. As key recorders of securities transactions, these institutions play a crucial role in embracing innovative technologies such as distributed ledger technologies (DLT) or blockchain.
Nadine Chakar, the Global Head of DTCC Digital Assets, stressed the importance of moving beyond mere acknowledgment of blockchain’s advantages to achieving concrete results. “We have a unique chance to revolutionize the financial system, but it will necessitate collaboration among a diverse range of companies,” Chakar remarked.
Regulation and technology present both challenges and opportunities in the digital assets space. Despite the apparent simplicity of these principles, the implementation details are intricate. Factors like settlement finality may differ based on the blockchain and jurisdiction, impacting the enforceability of smart contracts and legal certainty. On the regulatory front, while many institutions adhere to strict identification and customer verification procedures, the appeal of public blockchains for asset managers poses distinct challenges, including potential market abuses like frontrunning, technically known as maximum extracted value (MEV).
Jens Hachmeister, Managing Director of Issuer Services & New Digital Markets at Clearstream, highlighted the transformative potential of these technologies. “New technologies hold enormous promise to elevate financial markets to higher levels of efficiency, speed, and security,” he noted. Hachmeister called for industry-wide collaboration and standardized practices to ensure the sustainable integration of digital assets into the global financial system, underlining the role of financial market infrastructures in setting the groundwork for future digital markets.