DLT Gaining Traction Amongst Financial Markets Infrastructure – Citi


The result of a survey conducted and presented by Citi group as the second Securities Services Evolution white paper shows that there has been a global upshoot in the amount of engagement with Distributed Ledger Technology (DLT) amongst financial market infrastructures. It was discovered that DLT has gone increasingly mainstream in the midst of these global participants and other digital assets.

The Citi second Securities Services Evolution white paper publication included both qualitative and quantitative data derived from twelve financial markets infrastructures and about three hundred market participants. Most of the participants were banks, broker-dealers, asset managers, custodians, and institutional investors.

Based on the survey, 88% of the participants mentioned that they were either mulling over the idea or were already actively involved in exploring digital assets or DLT as the case may be. As a further reiteration, more than 50% of them believe that market infrastructures that are based on DLT have the capacity to impart on the post-trade processing cost.

Specifically, these participants claim that DLT-based market infrastructures can reduce the post-trading processing cost by up to 10% to 30%. Tokenization plays a beneficial role in market liquidity and tradable-asset variety, according to 92% of the participants. Another 79% perceive that achieving atomic settlement in less than ten years is possible.

DLT Ecosystem Regulation 

As per a statement published in an email by Okan Pekin, the Global Head of Securities Services at Citi,

“We are seeing a greater sense of momentum and purpose in all developments across the industry, in particular the determination to move to a T+1 settlement cycle. Delivering these changes will be no small feat but in due course offer the prospect of very substantial cost savings and efficiencies.”

With this new affinity for DLT amongst global financial markets infrastructures, more regulations may need to be channeled to the ecosystem. Earlier in the year, the European Securities and Markets Authority (ESMA) opened itself up for public comments in relation to its plan to regulate distributed ledger technology for securities trading and settlements.

In April, Gibraltar, one of the most forward-thinking countries for crypto regulations, updated its DLT regulatory framework so as to fight the growing market abuse in the country.

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