You may have read the recent announcement that DTCC is collaborating with SWIFT and more than a dozen market participants to test ways to establish interoperability across multiple blockchains. The goal of this work is to find an efficient and effective means to enable the seamless transfer of tokenized assets globally. We’re excited to be part of this effort because frictionless transacting is an important building block to creating the digital financial marketplace of the future.
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This initiative is particularly timely because, in many instances right now, banks and service providers are exploring how to leverage new technologies individually or as part of small and discrete pilots. What’s lacking is the widespread, industry-wide collaboration that’s critical to understanding the optimal architecture to incorporate digital assets into the ecosystem as well as the best structure to meet the needs of the widest cross-section of market participants.
This is problematic over the long-term because it has the potential to recreate the challenges of the past – specifically, a disconnected and inefficient puzzle of technology silos that use different standards and functionality, lack interoperability and hamper straight through processing. As these experiments move through the development lifecycle and expand in size and scope, firms will be challenged to connect to all or even just some of them due to cost, complexity and higher levels of risk, which will ultimately limit participation, market growth and innovation.
We need to encourage greater collaboration during these early days because standardization and developing the right architecture are critical as this technology matures. Just as important, at a time when many firms face intense cost pressures, they will want to maximize their use of existing infrastructure to advance digitization instead of having to build from scratch each time.
DTCC will continue to champion collaboration and serve as a strategic partner to our clients and the industry to help shape future digital endeavors. We’re intrigued by the possibilities of the oncoming digital revolution, and we’re committed to bringing our unique expertise in technology, trade processing, governance and standards to these issues. We’re looking forward to working with all market participants on this in the months and years ahead.