Digital Assets, Distributed Ledger Technology and the Future of Capital MarketsI N S I G H T R E P O R TM A Y 2 0 2 1
ContentsDigital Assets, Distributed Ledger Technology and the Future of Capital Markets2© 2021 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system.ForewordContextIntroductionKey insights1. BackgroundBusiness and technology developments in capital markets Overview of DLT in the capital markets contextTimeline of major technical, regulatory and business developments 2. DLT and digital assets in capital marketsSpectrum of future scenarios DLT-related considerations for different capital markets actors Framework for different approaches to DLT solutions3. Use case analysis by asset class/product lineEquity marketsDebt marketsSecuritized products Derivatives Securities financing Asset management/fund administrationEnablement use casesConclusionContributorsAcknowledgementsEndnotes34571415172426272829323546566472798487919496Cover: GETTY/PirankaInside: all GETTY/Poganka06, MicroStockHub, DKosig, Tetiana Lazunova, MicrovOne, Maxger, Enjoynz, Filo, Maxger, AF-studio, Filo, Koto Feja
Digital Assets, Distributed Ledger Technology and the Future of Capital Markets3ForewordIn recent years, the financial institutions comprising the capital markets have begun to approach digital transformation with a level of urgency previously seen only in consumer-facing financial services. The need to improve client service delivery, achieve greater efficiency and enable new services (e.g. through monetization of data) have converged on imperatives for all capital markets executives to explore how technology should be used to redesign product offerings and operations. At the same time, distributed ledger technology (DLT), of which blockchain is the most widely known example, has gone through several pendulum swings in terms of industry and public interest. Depending on one’s perspective, this technology could disintermediate the capital markets as we know them, radically simplify operations for leading capital markets players, help expand access to markets for small businesses and retail investors or fade into irrelevance. Since the World Economic Forum published The Future of Financial Infrastructure in 2016, we have seen relatively little of the blockchain-enabled transformation explored in the report. Yet we are potentially approaching an inflection point, with meaningful DLT use cases going live and many institutions acknowledging that this technology will likely play some role in the future of capital markets. This report explores the various ways in which this technology is starting to be used, as well as the challenges involved in attempting industry-wide transformation.Consistent with the World Economic Forum’s multista...
