During a tokenization discussion at the World Economic Forum in Davos today, a member of the audience asked about applying the principle of ‘same activity, same rules’ to digital assets. Perhaps unsurprisingly, the incumbent on the panel, Euroclear’s Lieve Mostrey was in favor, whereas Circle’s Jeremy Allaire and Stellar’s Denelle Dixon were less keen.
Euroclear’s Mostrey argued that regulation should be technology agnostic. She noted that Euroclear, Europe’s largest central securities depository (CSD), used the existing legal framework to launch a tokenization solution with the World Bank as the issuer.
However, outsiders might observe that CSDs are amongst the groups most challenged by distributed ledger technology (DLT). Much of their work can be automated with smart contracts and the blockchain can become the registry – if regulations adapt to allow that. This is what the EU’s DLT Pilot Regime and the UK Digital Securities Sandbox are exploring. CSDs will still be needed, but their role is set to evolve significantly.
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