DTCC Seeks to Unify Tokenisation Work
Posted by Colin Lambert. Last updated: October 17, 2024
Post-trade infrastructure provider DTCC has launched DTCC Digital Launchpad, a “sandbox” intended to bring together financial market participants and clear the path to scalable adoption of digital assets.
The utility says the sandbox will be an open ecosystem and feature market participants, technology providers, and others working together to identify and collaborate on meaningful pilots that have a clear path to production. DTCC cites research projecting that $16 trillion-worth of tokenised securities will be “on rails” by 2030, however it also observes that adoption of this technology has stalled as the industry continues working in silos. “Most digital asset initiatives today have differing and conflicting standards, controls, and operational processes, leading to a fragmented digital landscape,” DTCC states.
“DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology,” says Frank La Salla, DTCC president and CEO. “As an industry-owned and governed infrastructure for the world’s largest capital markets, DTCC is uniquely suited to drive industry collaboration under the banner of a larger goal: building a digital asset ecosystem that’s as safe and sound as the one we have for traditional securities today.”
The utility also released results of a proof of concept, led by Japan Securities Clearing Corporation, clearinghouse of Japan Exchange Group. This explored how central counterparties could use tokenisation to optimise the collateral management process for clearing members and their buy-side firms. In particular, it examined how margin calls and their associated processes could be automated, made more efficient and transparent for all participants using digital assets and smart contracts – or rules that automatically execute on a distributed ledger when certain conditions are met.
“We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach,” says Nadine Chakar, global head of DTCC digital assets. “The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”