Moving from theory to practice

On Thursday 14 November, the International Securities Service Association (ISSA) issued a new thought paper : Crypto Assets - Moving from theory to practice. Euroclear co-lead the industry working group that developed the thought paper.

Crypto Assets issued on Distributed Ledger Technology (DLT) networks or tokenisation platforms have the potential to profoundly transform the post-trade areas of the securities industry. By putting together issuers, intermediaries and investors to connect and collaborate directly on the same network, DLT has the potential to re-imagine post-trade processing from a linear model to a networked model where services can be provided by trusted third parties without mediating information, access.

Euroclear as well as other established capital markets FMIs, service providers and intermediaries acknowledge the transformative potential of Crypto Assets & DLT. Hence, it is no surprise that nearly every industry participant is experimenting with a number of proofs-of-concept as well as partnering with FinTechs and other market participants. . However similar to other technological changes with transformational potential, Crypto Assets and DLT will need to overcome certain challenges in our industry in order to cross the chasm from these initial proof of concepts to more mainstream adoptions.

In this paper, the industry working group which is composed of CSDs, Custodian Banks, Exchanges and FinTechs, outline recommendations and best practice considerations to overcome challenges in relation to Crypto Asset issuance, settlement, safekeeping and asset servicing. The paper also articulates the key legal and regulatory implications as well as the importance of standards and interoperability. In essence, the paper brings a much needed global post trade industry view on the relevant direction and solutions to be explored and challenges that need to be overcome to drive adoption.

This paper is a continuation of the DLT paper Infrastructure for Crypto Assets published by ISSA.

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"Crypto Assets and Distributed Ledger Technologies (DLT) have risen as an important  technology & solution that promises to deliver a real-time, more transparent, empowering and inclusive experience that could transform post-trade capital markets. Euroclear is pleased to have collaborated with the industry on this thought paper to highlight the best-practices, consideration and challenges for wider adoption of Crypto Assets and DLT in capital markets."

Jo Van de Velde, Managing Director – Head of Group Strategy and Product Expansion, Euroclear

Contact details:

Glen Fernandes  - Group Strategy

Tel +32 2 326 2798