Three of the world’s largest central securities depositories (CSDs) and central counterparties (CCPs) – Clearstream, DTCC, and Euroclear – have joined forces with the Boston Consulting Group (BCG) to unveil a comprehensive framework for digital assets. This framework aims to enhance the integration and efficiency of digital securities across financial markets. BCG has predicted that the digital assets sector could reach a remarkable $16 trillion by 2030, underlining the significant economic potential of this initiative.
The recently 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 players in recording securities transactions, these institutions play a critical role in adopting new 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 recognition of blockchain’s benefits and focusing on achieving tangible outcomes. Chakar stated, “We have a unique opportunity to revolutionize the financial system, but it will require collaboration across a wide range of firms.”
While the principles behind this framework may seem straightforward, the implementation details are complex. Factors like settlement finality can vary depending on the blockchain and jurisdiction, impacting the enforceability of smart contracts and legal certainty. On the regulatory front, although many institutions comply with strict identification and customer verification protocols, asset managers’ attraction to public blockchains presents unique challenges, including potential market abuses like frontrunning or maximum extracted value (MEV).
Jens Hachmeister, Managing Director of Issuer Services & New Digital Markets at Clearstream, highlighted the transformative potential of these technologies. He remarked, “New technologies have immense potential to enhance the efficiency, speed, and safety of financial markets.” Hachmeister called for industry-wide collaboration and unified standards to ensure the sustainable integration of digital assets into the global financial system, underscoring the role of financial market infrastructures in establishing the groundwork for future digital markets.
