Settlement and Custody of digital assets Part II (20th October 2020)

20th October 2020 2.00-3.00 pm BST time

Incumbents in the securities services industry concluded last year that blockchain would not disrupt post-trade services after all. Yet the potential advantages of tokenising equity and debt securities, especially in terms of operational, intermediation and liquidity cost savings, remain compelling. And paths through the obstacles to progress are becoming clearer. Payment tokens and Stablecoins are filing the gaps at least until Central Bank Digital Currencies (CBDCs) finally solve the problem of on-chain (or on-network) settlement in multiple fiat currencies. Effective tools for safekeeping digital assets, and the orthodox financial assets that underpin some of them, are being designed. Work is under way to agree the technical standards that will allow tokenisation platforms and established trading platforms to inter-operate. Governments are gradually publishing rulings and even laws which offer issuers of digital tokens and their investors the regulatory certainty they need. This Future of Finance event picks up where the first left off and explores the current state of play in these four areas: settlement, safekeeping, standards and regulation.

The conventional view of the impact of blockchain technologies on the clearing and settlement of securities has shed the alarmist tone of 2016-2018. A string of blockchain proofs of concept and pilot tests that led nowhere – and delays and modifications to the one major industry project that did press ahead – have convinced industry insiders that their industry is safe from disruption. In their view, it is efficient enough already. Even where it is not, shifting off ageing but complicated technology platforms are too risky and expensive to undertake. Blockchain might be relevant in some limited areas (such as collateral management) or applicable to other asset classes (such as commodities and real estate) but, runs the argument, less ambitious technologies such as robotic process automation (RPA) and data-crunching artificial intelligence and machine learning (ML) tools have more to offer the industry. The lasting legacy of the era of blockchain hype might, however, be something different – namely digital or tokenised assets listed and exchanged on platforms where transactions settle instantly between counterparties rather than via multiple intermediaries and the assets are safekept in wallets secure from external threats of the kind that bedevilled the crypto-currency markets. The elements that will enable tokenised digital assets markets to take off – closed networks, scalable technologies, settlement finality, asset safety, regulatory certainty and the standards that drive inter-operability – are being put in place. If issuers can be convinced security tokens will lower their cost of capital, and investors are persuaded that security tokens can increase their rate of return, there is every reason to believe that the global capital markets could be on the cusp of a series of far-reaching structural upheavals. The purpose of this webinar is to review progress towards true delivery of tokens against fiat currency payment with settlement finality; look at developments that can overcome the practical, technical and legal challenges of safekeeping tokenised assets; assess the pioneering efforts to achieve inter-operability between different token issuance, trading and settlement platforms and between token platforms and traditional platforms and exchanges; and appraise jurisdictions which are in the vanguard of providing a settled legal, regulatory and infrastructural environment for tokenised digital assets.

Topics of discussion include:

1. How can the issue of central bank digital currencies (CBDCs) on tokenization platforms be encouraged and accelerated?
2. What are the operational pillars of secure and safe custody for security tokens?
3. Is there a difference between the infrastructure for security tokens and native crypto tokens?
4. What role does inter-operability play at this stage in the adoption process? Who is responsible for oversight and implementation?
5. How can security token issuers, investors, and service providers best be provided with regulatory certainty?
6. Will it take a governmental or regulatory intervention to initiate a transition from the current system to a tokenized future?

PANELLISTS

Stephen Richardson, Vice President Product Strategy at Fireblocks https://www.linkedin.com/in/stephenrichardson4/

Stephen Richardson is the VP of Product Strategy at Fireblocks. Stephen has multiple years of experience in both traditional and crypto-focused financial institutions. Stephen’s role at Fireblocks involves structuring, developing, and evaluating strategic opportunities with traditional financial services and native digital asset companies that align with the growth of the Fireblocks platform.

Paul Ridley, CAO Wholesale Digital Office at Nomura https://www.linkedin.com/in/paul-ridley/

Paul Ridley is the CAO of Nomura’s Wholesale Digital Office, where he leads the firm’s digital asset strategy and execution from Hong Kong. Prior to Nomura, he worked in private equity and spent 10 years as a strategy consultant, most recently with the Boston Consulting Group in London and New York.

Ken Nakamura, Head of Stablecoins at GMO Internet https://www.linkedin.com/in/ken-nakamura/

Ken Nakamura is the Head of Stablecoins at GMO Internet and also the CEO of GMO-Z.com Trust Company, the issuer of the world’s first regulated JPY-pegged stablecoin GYEN. He has served GMO Internet Group for over ten years with a proven track record in the development and execution of new businesses. Previously, he was the Chief Marketing Officer for GMO-Z.com Switzerland AG, where he oversaw bitcoin mining business strategy, sales, and partnership development.

Sylvain Prigent, Co-Founder and CPO of Société Générale – Forge https://www.linkedin.com/in/sylvain-prigent-969786…

Société Générale – Forge is a fully integrated subsidiary of Société Générale Group, experimenting disruptive business solutions using blockchain technology to develop new digital capital market activities

Moderated by Dominic Hobson, Co-Founder at Future of Finance https://www.linkedin.com/in/dominic-hobson-49b8222…