GFMA Report on The Impact of Distributed Ledger Technology in Global Capital Markets
The Global Financial Markets Association (GFMA) together with Boston Consulting Group (BCG), Clifford Chance and Cravath, Swaine & Moore LLP, have published a new report highlighting the potential transformative benefits of Distributed Ledger Technology (DLT) for capital markets and calling for market participants to proactively shape its future use, as well as for greater regulatory clarity from policy makers.
Excerpt
Executive Summary
This report provides a comprehensive assessment of the opportunities and risks posed by Distributed Ledger Technology (DLT) – including DLT-based Securities (both Tokenized Securities and DLT-native Security Tokens) – and associated activities across the end-to-end securities lifecycle. Co-developed with Global Financial Markets Association (GFMA) member firms, the report represents the perspectives of industry practitioners who are pioneering research and real-world applications of DLT use cases across the world.
Innovation continues to redefine the art of the possible. Progress in distributed computing and data encryption – brought together in DLT and the emerging digital asset ecosystem – could play a fundamental role in the next major wave of developments in capital markets. Examined through ground-up analysis in this report, market participants have identified areas where new technology could play a pivotal role in the coming decade and beyond. These areas include new approaches to deliver operational efficiency, cost efficiencies, product innovation, broader market access, and new liquidity pools.
Current discourse is rightly focused on ensuring DLT applications satisfy regulatory requirements and mitigate against any potential risks associated with the use of new technology. To this end, several jurisdictions are rolling out sandboxes or pilot regimes that facilitate firms to experiment with and issue DLT-based products to their clients. At the same time, there are live use cases in capital markets, such as those profiled in this report, that are already starting to capture opportunities and realize benefits for clients, while remaining compliant with applicable rules and regulations.