Three leading financial market infrastructures (FMIs) - DTCC, Clearstream, and Euroclear - in conjunction with The Boston Consulting Group (BCG), have released a blueprint for building an industry-wide digital asset ecosystem to facilitate the acceptance of tokenized assets.

With the tokenization of illiquid assets expected to represent a $16 trillion business opportunity globally by 2030, the space has garnered widespread attention. However, institutional adoption remains challenging due to fragmented innovation and a lack of broader ecosystem development due to the small size of projects.

Digital Asset Adoption Framework

The co-published report, entitled “Building the Digital Asset Ecosystem,” seeks to redirect the industry's focus by outlining six principles to facilitate the successful adoption of tokenization and digital asset securities (excluding cryptocurrencies).

These principles include legal certainty, regulatory compliance, resilience and security, protection of customer assets, connectivity, and interoperability and operational scalability.

Nadine Chakar, Global Head and Managing Director of Digital Assets at DTCC, said, “While many companies recognize that blockchain has tremendous potential for cost savings, capital efficiency, and risk mitigation, the industry needs to shift direction and demonstrate tangible results and value creation.”

Collaboration standards and risk mitigation

The purpose of these principles is to provide a roadmap for industry collaboration and set comprehensive standards for the digital asset market. In addition to these principles, the paper describes a series of risk management controls to help firms mitigate potential risks associated with digital assets, such as asset mismanagement and smart contract governance.

Jens Hachmeister, Managing Director, Head of Issuer Services and New Digital Markets at Clearstream, said, “New technologies have great potential to take financial markets to greater levels of efficiency, speed and security.”

As part of the program, BCG conducted an analysis that included a review of approximately 100 regulations and white papers from different jurisdictions, as well as more than 20 interviews with key market players and technology vendors.

Philippe Laurensy, Managing Director and Head of Product, Strategy and Innovation at Euroclear, said, “Our goal is to build innovative solutions that meet our clients' evolving needs and drive the industry forward, which includes enabling our clients the flexibility to create space on their balance sheets through tokenization, leading to new business opportunities. “