DTCC, Clearstream and Euroclear develop framework to advance adoption of digital assets
Today, three of the world’s largest financial market infrastructures (FMIs) – DTCC, Clearstream and Euroclear – in collaboration with Boston Consulting Group (BCG), unveiled a blueprint for establishing an industry-wide digital asset ecosystem to drive acceptance of tokenised assets.
By 2030, the tokenisation of global illiquid assets is projected to be a US$16 trillion business opportunity. However, progress on institutional adoption has reached an inflection point as firms continue innovating in silos, with small-scale initiatives that fail to progress or prioritise broad ecosystem development. The paper, “Building the Digital Asset Ecosystem”, looks to shift the industry’s focus by defining six principles to promote the successful adoption of tokenisation and digital asset securities (excluding cryptocurrencies). It also details a comprehensive set of risk management controls to underpin the future of digital markets.
The six principles are intended to serve as a roadmap for the industry to come together and develop comprehensive standards for the digital asset marketplace. They include:
- Legal certainty – ensuring operations comply with law
- Regulatory compliance – encouraging alignment with regulatory frameworks
- Resilience and security – developing robust infrastructure capable of resisting disruptions while protecting sensitive data
- Safeguarding customer assets – implementing governance via smart contracts to manage assets securely
- Connectivity and interoperability – facilitating transactions and flexible settlements across diverse networks
- Operational scalability – striving for efficiency and cost-effectiveness through standardisation
“While many firms recognise that blockchain holds enormous promise to deliver cost savings, capital efficiencies and reduced risk, the industry needs to pivot and demonstrate tangible results and value generation,” said Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets. “We have a unique opportunity to transform the financial system, but it will require collaboration across a wide cross section of firms to build the infrastructure, standards, controls and governance to underpin digital markets. We are proud to lead this conversation and will use this paper as a springboard to build consensus and drive efforts forward.”
“New technologies bear immense potential to bring financial markets to the next level of efficiency, speed and safety,” said Jens Hachmeister, Managing Director, Head of Issuer Services & New Digital Markets at Clearstream. “To make this evolution a sustainable one, we need industry-wide collaboration and unified standards to overcome current challenges and drive the seamless integration of digital assets in the global financial ecosystem. As financial market infrastructures, we are developing the foundation for future digital markets for the benefit of our clients and all market participants.”
“Through a true collaborative effort, we have developed a plan to demonstrate the potential of digital assets,” said Philippe Laurensy, Managing Director and Head of Product, Strategy & Innovation, Euroclear. “Our objective is to create innovative solutions that will address the evolving needs of our customers and drive industry advancements which includes clients having the flexibility to create space on their balance sheets through tokenisation, therefore leading to new business opportunities. This collaboration is a testament to our commitment to innovation, and we look forward to the exciting opportunities that lie ahead and the positive impacts to be made for our clients and the global market.”
The partnership between DTCC, Clearstream, and Euroclear draws on decades of shared experience providing infrastructure for global capital markets, as well as a vast network of client relationships, and a strong track record of supporting market evolution. The latest paper builds upon efforts by the FMIs last year to galvanise market participants globally on establishing a digital asset ecosystem, with the issuance of a whitepaper titled “Advancing the Digital Asset Era, Together.”
In addition to the six core principles, the paper also presents a list of controls to help firms mitigate risks such as asset mismanagement or insufficient controls to govern smart contracts. Recommended controls include defining who can access smart contracts, and maintaining a comprehensive record of digital asset events/transactions.
The FMIs collaborated with BCG, which conducted an analysis including reviews of approximately 100 regulations and whitepapers across multiple jurisdictions, and over 20 interviews with key market participants and technology vendors.
[Editorial note: Please find here a high resolution photo of Jens Hachmeister.]
About Clearstream
Clearstream is the innovative and trusted post-trade business for the global markets. It runs the leading securities and funds servicing ecosystems of tomorrow. The company operates the German and Luxembourg central securities depositories and an international central securities depository for the Eurobonds market. With 18 trillion Euros in assets under custody, it is one of the world’s largest settlement and custody firms for domestic and international securities. Its digital post-trade platform D7 provides a fully digital alternative to conventional physical issuance and processing of securities. It also delivers premier fund execution, distribution, data and reporting services, covering over 55 fund markets worldwide. Clearstream is part of the Deutsche Börse Group, an international exchange organisation and provider of innovative market infrastructures. To learn more, visit us at www.clearstream.com.
About DTCC
With over 50 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 20 locations around the world, DTCC, through its subsidiaries, automates, centralises, and standardises the processing of financial transactions, mitigating risk, increasing transparency, enhancing performance and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm innovates purposefully, simplifying the complexities of clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes, bringing enhanced resilience and soundness to existing financial markets while advancing the digital asset ecosystem. In 2023, DTCC’s subsidiaries processed securities transactions valued at U.S. $3 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $85 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes more than 20 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, X, YouTube, Facebook and Instagram.
About Euroclear
Euroclear group is the financial industry’s trusted provider of post-trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency, and connections to financial markets to sustainable economic growth. Euroclear provides settlement and custody to domestic and cross-border securities for bonds, equities and derivatives, and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation, and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden, Euroclear UK & International and MFEX by Euroclear. To learn more, visit www.euroclear.com.