Three well-known financial market infrastructures (FMIs) – DTCC,
Clearstream, and Euroclear – along with Boston Consulting Group (BCG), have
revealed a blueprint aimed at establishing an industry-wide digital asset
ecosystem to foster the acceptance of tokenized assets.
Projected to reach a $16 trillion business opportunity by
2030, the tokenization of global illiquid assets has garnered significant
attention. However, institutional adoption has faced challenges due to
fragmented innovation and small-scale initiatives lacking broader ecosystem
development.
Framework for Digital Asset Adoption
The jointly released paper, titled “Building the
Digital Asset Ecosystem,” endeavours to redirect industry focus by
outlining six principles intended to facilitate successful adoption of
tokenization and digital asset securities, excluding cryptocurrencies.
These principles encompass legal certainty, regulatory
compliance, resilience and security, safeguarding customer assets, connectivity
and interoperability, and operational scalability.
Collaborative Standards and Risk Mitigation
The aim of these principles is to provide a roadmap for the
industry to collaborate and establish comprehensive standards for the digital
asset marketplace. Alongside these principles, the paper also introduces a
range of risk management controls to aid firms in mitigating potential risks
associated with digital assets, such as asset mismanagement and governance of
smart contracts.
BCG conducted an analysis as part of this initiative, which
involved reviewing approximately 100 regulations and whitepapers across various
jurisdictions, as well as conducting over 20 interviews with key market
participants and technology vendors.
This article was written by Tareq Sikder at www.financemagnates.com.
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