Clearstream, DTCC, and Euroclear, three of the largest central securities depositories (CSDs) and central counterparties (CCPs) in the world, have partnered with Boston Consulting Group (BCG) to introduce a comprehensive framework for digital assets. The aim of this framework is to enhance the integration and efficiency of digital securities across financial markets. BCG has previously predicted that the digital assets sector could reach a staggering $16 trillion by 2030, highlighting the significant economic potential of this initiative.
The newly released document, titled “Building the Digital Assets Ecosystem,” builds upon a previous publication that discussed strategies to address fragmentation in the digital securities sector. As key recorders of securities transactions, these institutions play a crucial role in adopting new technologies such as distributed ledger technologies (DLT) or blockchain.
Nadine Chakar, the Global Head of DTCC Digital Assets, stressed the need to go beyond recognizing the benefits of blockchain and instead focus on achieving tangible outcomes. Chakar stated, “We have a unique opportunity to transform the financial system, but it will require collaboration across a wide range of firms.”
However, implementing these principles is not without its complexities. Issues such as settlement finality can vary depending on the blockchain and jurisdiction, which can impact the enforceability and legal certainty of smart contracts. On the regulatory front, while many institutions comply with strict identification and customer verification protocols, the use of public blockchains by asset managers presents unique challenges, including the potential for market abuses like frontrunning.
Jens Hachmeister, Managing Director of Issuer Services & New Digital Markets at Clearstream, emphasized the transformative potential of these technologies. Hachmeister remarked, “New technologies have immense potential to enhance the efficiency, speed, and safety of financial markets.” He called for industry-wide collaboration and unified standards to ensure the sustainable integration of digital assets into the global financial system, highlighting the role of financial market infrastructures in laying the groundwork for future digital markets.