Distributed ledger technology (often blockchain) has not only generated crypto as a new asset class to stuff in our safes. It could also bring improvements in several of the areas that we focus on as financial services professionals:
- the processes,
- the balance sheets,
- settlement counterparty and credit risk, and
- liquidity and cash management.
Highlighting some industry examples, this block of sessions will discuss some of the changes we may be up for. First, however, an overview to get us all up to speed on the topic.
Moderator: Olaf Ransome, Founder, 3C Advisory LLC
16:30 SESSION 1: Issuance
Is there upside in using DLT rather than the existing traditional-finance (“TradFi”) process – for example when it comes to syndication, the use of a CSD, or the delivery-versus-payment settlement? What can tokenisation offer that securitisation cannot? And will there be new forms of assets that will ignite trading?
Naveed Nasar, Co-Founder, agora digital capital markets
16:45 SESSION 2: Trading
Exchange-based trading in crypto markets is all based on pre-funding. Is this a better model than in TradFi? DLT-driven news in the area also includes “automated market-making apps” (AMMs), and crypto derivatives markets with automatic risk adjustments and new (pre-funded) principles around the margin requirements. Good things for TradFi players?
Usman Ahmad, CEO, Zodia Markets by Standard Chartered and OSL
17:00 SESSION 3: Settlement and custody
For settlement and custody, what changes might we see in the traditional roles of CSDs and ICSDs? This is just one of the questions that DLT raises in the settlement and custody area. The pre-funded approach at crypto exchanges and new digital ones like SDX is one thing that looks at odds with traditional ways … so which ancillary activities such as financing will need to be available to support this new model? And how will the role of the custodians change, for example from being involved post trade to pre-trade?
Amar Amlani, Executive Director, Digital Assets, Goldman Sachs
17:15 SESSION 4: Money … or rather the means of payment
We can see that in the digital asset space there are new exchanges, or execution venues, and there are new custody solutions. Our settlement processes also need a means of payment. The line to date is that if the assets are on-chain then we need that means of payment to be on-chain. How to solve for this? Does it require governments or central banks to lead with a CBDC or are private stablecoins sufficient? What are the requirements for something to be a widely acceptable means of payment? How much of an enabler would it be for wholesale markets to have a CBDC or its private sector equivalent?
Jonas Gross, Head of Digital Assets and Currencies, etonec