In this guest post, Wayne Hughes, who is Head of Digital Assets at BNP Paribas’ Securities Services business, explores how asset servicing is evolving to support capital markets tokenization.
As the regulatory frameworks for the tokenisation of securities continue to evolve, market participants need to get to grips with the requirements of new asset classes and new ways of managing existing asset classes. Fostering real change will be a process and the industry is likely to take an incremental approach, experimenting with distributed ledger technology and digital asset processes in regulated environments to build a resilient, compliant, and sustainable digital asset space.
Much like the regulators themselves, market participants must experiment to better understand their operational, legal, and administrative aspects. Important lessons can be learned from experiments with these new technologies and asset types and from a practical perspective, understanding the information flows, asset safekeeping responsibilities, liabilities and risks will be key to better supporting the market in the future.
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