European FMIs Clearstream, DTCC and Euroclear unveil tokenised asset framework
The Depository Trust and Clearing Corporation (DTCC), Deutsche Börse’s Clearstream and Euroclear have released a joint blueprint intended to increase institutional adoption of tokenisation and digital asset securities.
Clearstream partners DTCC and Euroclear for tokenisation framework
The blueprint is outlined in the partners’ paper, “Building the Digital Asset Securities Ecosystem”, which was produced in collaboration with Boston Consulting Group (BCG).
In it, the financial market infrastructures (FMIs) set out six principles intended to “serve as a roadmap for the industry to come together and develop comprehensive standards for the digital asset marketplace”, according to a statement.
They address regulatory compliance to encourage alignment with regulatory frameworks; legal certainty for ensuring operations comply with the law; and resilience and security to develop “robust infrastructure capable of resisting disruptions while protecting sensitive data”.
The principles also propose measures for safeguarding customer assets with smart contract-based governance; connectivity and interoperability to facilitate transactions and “flexible settlements across diverse networks”; and operational scalability for “striving for efficiency and cost-effectiveness through standardisation”.
Elsewhere in the paper, the partners also highlight a list of controls to help firms mitigate risks such as asset mismanagement or insufficient controls to govern smart contracts.
This includes recommendations for who can access smart contracts, and how a comprehensive record of digital asset events/transactions can be properly maintained.
Nadine Chakar, MD, director and global head of DTCC Digital Assets, says the industry “needs to pivot and demonstrate tangible results and value generation” from the blockchain, with the effort requiring “collaboration across a wide cross-section of firms to build the infrastructure, standards, controls and governance to underpin digital markets”.
“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,” adds Jens Hachmeister, MD, head of issuer services and new digital markets at Clearstream. “As FMIs, we are developing the foundation for future digital markets for the benefit of our clients and all market participants.”
This latest call from three of Europe’s largest FMIs comes as the industry appears to be increasing its focus on the benefits of tokenisation.
It was previously reported this month that Standard Chartered Bank in Hong Kong (SCBHK) has completed a proof-of-concept (PoC) in partnership with Mastercard, Mox Bank and government bond platform Libeara which explored the “operational and risk management benefits of tokenised deposits” to support the settlement of tokenised carbon credits.
