⭐ Read more about this interview: MembersCap is repackaging its tokenised funds to meet the needs of DeFi traders

Learn more and connect with Future of Finance:

🌐 https://www.futureoffinance.biz/

[in] https://www.linkedin.com/company/future-of-finance-fof

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⭐ Read more about this interview: https://www.futureoffinance.biz/expect-more-game-changers-in-2026-says-digital-asset-exchange-21x

Learn more and connect with Future of Finance:

🌐 https://www.futureoffinance.biz/

[in] https://www.linkedin.com/company/future-of-finance-fof

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The pivot by R3 from private to public blockchains through its partnership with Solana might be one of those apparently arcane technical deals - like IBM and Microsoft or Apple and ARM - that changes everything. It allies regulated, institutional money with an open blockchain protocol that can compete with existing equity and debt marketplaces on volume, speed and price, while still delivering on the central promise of blockchain: elimination of high levels of financial intermediation. It could, by accelerating the tokenisation of traditional financial assets as well as traditional forms of money, achieve what Ethereum has so far failed to deliver. Future of Finance Co-founder Dominic Hobson asked Richard Brown, Chief Executive of R3 Labs, why the company has set such a radical new course.

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What is the event about?

Many corporations, especially in financial services, attribute much of their success to the quality of their talent, which might suggest that they would also credit the HR function with helping them to acquire, develop, motivate, and retain said talent. However, managers and employees instead often complain that HR is a large, growing and not particularly helpful function that creates policies and processes that interfere with corporations’ ability to effectively manage their talent. Whether justified or not, many managers fault HR for not adequately or appropriately leveraging technological advances for the benefit of both employees, managers, and shareholders. This event will explore how recent advances in AI can improve the efficiency and effectiveness of the HR function, reducing the resources it requires while also transforming the speed and quality of services it delivers.

Who is on the panel?

Todd Gershkowitz - Co-CEO at Paystandards

Anthony Poole - Partner, Human Capital at AON

Pavi Singh - Partner, UK & Ireland Leader HR and Talent Transformation Consulting at IBM

Eric Weinberg - VP Head of Executive and Equity Compensation at Prudential Financial

Moderated by Dominic Hobson Co-Founder and Editorial Director at Future of Finance

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There are two main obstacles to the scaling of the markets in digital assets and one of them is the lack of interoperability between blockchain networks and between blockchain networks and traditional financial markets. The default answer, hallowed by history in multiple industries, is standards. By enabling different networks to exchange data, they multiply the overall volume of counterparties and transactions. Unfortunately, attempts to achieve interoperability standards in digital assets suffer from limited usage and winner-takes-all proprietorial schemes, condemning most market participants to deploy risky or clumsy workarounds. So it is significant that the Global Legal Entity Identifier Foundation (GLEIF), set up by the Financial Stability Board in 2014 to overcome a major accelerant of the Great Financial Crisis of 2007 to 2009 – namely, the lack of a trusted counterparty identification standard on a global scale – has broadened its work to encompass digital assets. Dominic Hobson, co-founder of Future of Finance, spoke to Alex Kech, CEO of GLEIF.

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In 2026 Kalyp Technologies celebrates the tenth anniversary of its foundation as a provider of blockchain infrastructure to the regulated capital markets. It is an ambition that has required patience as well as more obvious resources, since securing the regulatory endorsement on which institutional engagement depends is a lengthy process. But now the company has built an open financial market infrastructure of its own, the Digital Securities Depositary Corporation (DSDC), and is embarked on its first major initiative - making American Depositary Receipts (ADRs) available as Digital Depositary Receipts (DDRs). Future of Finance co-founder Dominic Hobson spoke to Thorsten Peisl, Founder and Chief Executive of Kalyp Technologies.

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Panellists: John Allan, Head of the Innovation and Operations Unit at the Investment Association; Romin Dabir, Partner, Financial Services and Regulation, Reed Smith; Anna Matson, EMEA Head of Digital Assets and Innovation, Northern Trust.

To download the book for free, Click here.

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Panellists: Ciarán McGonagle, Chief Legal and Product Officer at Tokenovate; Steve Whyman, European Commercial Head of Digital Asset Funds and Business at Apex.

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Panellists: Adrian Dale, Head of Regulation & Market Practice at the International Securities Lending Association (ISLA); Marcus van Abbé, Head of Digital Market Infrastructure at R3; Steve Whyman, European Commercial Head of Digital Asset Funds and Business at Apex; Roy Zimmerhansl, Partner and Head of Capital Markets, WTS Hansuke.

To download the book for free, Click here.

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Panellists: Doug Bambrick, Head of the UK Custody Product for the UK and Middle East, BNP Paribas Securities Services; Basu Choudhury, Head of Partnerships and Alliances, OSTTRA; Yalini Isweran, Executive Director, Product Management at DTCC Digital Assets; Martin O’Connell, Solutions Architect, HQLAx.

To download the book for free, Click here.

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Panellists: Martin Watkins, CEO of Montis Group; Michele Curtoni, Head of Strategy at SIX Digital Exchange; Max Heinzle, founder and CEO of 21X; Vic Arulchandran, Director, Deutsche Börse | Clearstream and Head of Digital Product and Market Design; and Yalini Isweran, Head of the Digital Launchpad at the Depository Trust & Clearing Corporation (DTCC).

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Panellists: Ben Brophy, Head of Blockchain at Fidelity International; Bob Ejodame, Vice President, Capital Markets, at INX; Lucas Bruggeman, CEO and President of the Board at BX Swiss Exchange; Massimo Butti, an independent adviser to several companies involved in digital assets; and Severin Kranz, Head of Business Development at 21X.

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Panellists: Benjamin Dean, Director of Digital Assets Strategy at WisdomTree; Katie Richards, Head of New Markets and Product Development at Incore Bank; Murat Ögat, Co-founder and CEO at Aktionariat; and Pat LaVecchia, CEO and Founder of Oasis Pro.

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Panellists: Hirander Misra, Chairman and CEO of GMEX Group; Marcus van Abbé, Head of Digital Market Infrastructures at r3; Rita Martins, Head of Product Ecosystem, Digital Assets, at the London Stock Exchange Group (LSEG); Dr Robert Barnes, co-CEO at BPX Digital Securities Exchange; and Thomas Labenbacher, CEO and Founder of Assetera.

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Panellists: Reyer Kooy, Global Head of Operations – Digital at Apex Group; Remo Glauser, Product Head in Tokenisation at Sygnum Bank; Prasanth Kalangi, Founder and CEO at Zoniqx; and Richard Shade, Chief Operating Officer at Archax.

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A Future of Finance interview with Quant Networks’ Chief Product Officer Martin Hargreaves. Quant is applying programmable payments to modernise payments processes and workflows, embedding programmability at customer account level rather than into the payments infrastructure. Speaking to Bob Currie, Contributing Editor at Future of Finance, Hargreaves describes how this model can improve automation, security and flexibility for users, while reducing fragmentation in the payments ecosystem.

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Rob Krugman, Chief Digital Officer at Broadridge, speaks to Bob Currie about how financial services organisations are thinking about their futures and how Broadridge applies a customer-led Agile development approach to drive its innovation strategy.

Recognising that not every development idea will result in a live implementation, Krugman explores what makes the difference between success and failure and how it has applied this thinking to business use-cases, including the development of its ClearFi data insights platform and its distributed ledger repo solution.

In managing its innovation lab, 605 Studios, Krugman explains how Broadridge supports a mix of ‘disruptive’ and ‘synergistic’ project initiatives, explaining why disruptive projects typically grow most effectively within the innovation hub, while synergistic projects may be better nurtured within existing business units and product teams.

In doing so, Broadridge adopts a UniFI approach that attempts to break down the barriers between digital and traditional silos, with blockchain, tokenisation and AI technologies playing a central role in defining their mutual evolution.

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Technology-driven securitisation platform Yooro aims to simplify investor access to private markets, focusing on investors in the European Union, UK, Switzerland and the UAE. The company’s Founder and Chief Executive Milo Guastamacchia speaks to Bob Currie about how this is reshaping approaches to fundraising in unlisted markets, while attracting new and wider categories of investor that may not have been attracted previously to private capital issues or structured products.

The result, says Guastamacchia, is a more “democratic” pathway for private markets investment, delivering better access to the market, greater transparency and improved ‘voice’ for the investor.

The sweet spot for Yooro is to apply securitisation and tokenisation in tandem, bringing real-world assets into a digital DLT-based environment and building secondary market liquidity in those instruments. Assets are typically held by a special purpose vehicle wrapper under Luxembourg law.

More broadly, the discussion reflects on Yooro’s formation and ambitions, delivery of its Securitisation-as-a-Service methodology, and what the future holds as it expands its product set and solutions coverage.

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R3 celebrates its tenth anniversary this year. Richard G. Brown, R3’s Chief Technology and Product Officer, speaks to Bob Currie about the drivers for Corda’s design, how these are changing, and how far the company has fulfilled the targets that it envisaged at formation. 

The discussion explores the potential for convergence of private and public blockchain ecosystems, thereby potentially making a wider range of higher-quality assets available to DeFi investors and tapping into a large pool of demand and liquidity sitting on public blockchain. But what can we say at this stage about the mechanics of building this cross-chain interoperability?

In bringing real-world assets to DeFi, we examine how to retain the simplicity and accessibility of permissionless chains while accommodating TradFi’s complex lifecycles and risk protocols.

In delivering convergence of public and private ecosystems, we address the difficulties in ensuring that financial institutions, and their regulators, are comfortable in transacting with investors or counterparties operating in a public ecosystem. What are the challenges in delivering the institutional-standard security and finality that these FIs will continue to expect? 

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The seminar, held in conjunction with Future of Finance, attracted 116 registrants. They heard Lidia Kurt, CEO of BX Digital, Michael J. Cyrus, Head of Short-Term Products, Equity Finance & FX at DekaBank, Mike Reed, Head of Partnership Development for Digital Assets at Franklin Templeton, Jasmine Burgess, Chief Risk Officer at Coinbase Asset Management, and Lloyd Wahed, Founder and CEO at Members Capital Management, discuss the question from a variety of angles. The registrants contributed to the discussion by completing an on-line poll. 

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Tokenovate delivers post-trade automation for derivatives and securities finance trades. Chief Legal and Product Officer Ciarán McGonagle speaks to Future of Finance’s Bob Currie about how the company is applying blockchain and smart contract technology to build a financial ecosystem that is automated, resilient and efficient.

Representing a financial product as a bundle of rights and obligations governed by conditional logic, McGonagle reflects on the flexibility offered by smart contracts in managing the cash flows, transfers of ownership and other lifecycle events associated with these contracts. He explains how Tokenovate’s unused transaction output (UTXO)-based model shapes the legal remedies available to asset owners in case of legal dispute or misappropriation – and how this may differ from other flavours of blockchain.

Drawing on his previous experience working at ISDA, McGonagle discusses how Tokenovate is applying the common domain model (CDM) to translate standard representation of key trade terms into real-world systems and workflows. In closing, he reflects on how the company is contributing to public policy formation and potential outcomes from its representations in Washington and Brussels, its work with financial regulators and its participation at New York Climate Week.

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The panellists for this discussion were Laurent Kssis, Board Member and Strategic Advisor to Issuance.Swiss AG; Philip Rage, Director of Strategic Initiatives at Soter Insure; Tariq Rasheed, a Partner at Reed Smith; Jeet Singh, Partner and EMEA Blockchain Leader at EY; and, as moderator, Ed Pugh, Development Director, Fintech and Digital Assets, at Aon.

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The panellists for this discussion were Glenn Morgan, Senior Vice President and Digital Asset Practice Leader at Aon; Anya Nova, Director of Sales, Europe at GK8 Custody; Donald Brouwer, Vice President of Business Development at Dfns; and Tom Pikett, Director and Digital Assets Product Manager at BNY.

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The panellists for this discussion were James Pollock, EMEA Sales Director at Digital Asset; Kara Kennedy, Head of Digital Asset Product at J.P. Morgan Securities Services; Jürgen Hofbauer, Global Head of Strategic Partnerships at Taurus SA; Adam Groom, Head of Revenue and Exchanges EMEA at Copper; Thilo Derenbach, Head of Sales and Business Development, Digital Securities Services, at Clearstream; and, as moderator, Monica Summerville, Head of Capital Markets Technology Research at Celent.

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The panellists for this discussion were John Siena, Associate General Counsel and Co-Head of Regulatory Strategy at Brown Brothers Harriman (BBH); Monica Gogna, Partner and Head of the Financial Institutions Law Group at EY; Romin Dabir, partner at Reed Smith; and Yvonne Deane Harte, Director for Secondary Markets and Post Trade policy at UK Finance.

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The panellists for this discussion were Angie Walker, Global Head of Banking and Capital Markets at Chainlink; Anoosh Arevshatian, Group Chief Risk Officer at Zodia Custody; Keith O’Callaghan, Managing Partner at Archax Capital Limited; Qian Jian, Director, Digital Assets Strategy, SWIFT; and Dr Robert Barnes, co-CEO at BPX Digital Securities Exchange.

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Zoniqx, the California based pioneer of tokenisation platforms as a service, believes artificial intelligence compliance and interoperability are the keys to scaling the transformation of real world assets into digital assets. Dominic Hobson, Co-Founder and Editorial Director at Future of Finance interviewed Sanjeev Birari, Co-Founder and Chief Business Officer of Zoniqx to explain more, please watch, listen and read the interview below.

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This episode is a summary of Panel 6, titled What tokenisation will enable the financial markets to deliver tomorrow which they cannot provide today.

The Panellists were Breige Tinnelly, Head of Market Development at Archax; Gary O’Brien, Head of Bank and Broker Segment Strategy, Securities Services at BNP Paribas Securities Services; and Ralf Kubli, blockchain investor and board member at the Casper Association.

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This episode is a summary of Panel 5, titled "Why the benefits of tokenisation depend on the issuance of “native” rather than “asset-backed” (or "digital twin”) digital assets". 

The Panellists taking part were Anthony Woolley, Head of Business Development and Marketing at Ownera; Emma Lovett, Credit Lead for the Markets Distributed Ledger Technology team at J.P. Morgan; Ian Hunt, independent authority and adviser on buy-side business processes and technology; Vic Arulchandran, Director and Head of Digital Product and Market Design at Deutsche Börse| Clearstream; and Stephen McConville, Head of Structuring at Hedgehog Invest.

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This episode is a summary of Panel 4, titled "How a common platform or unified ledger could unleash network effects in the token markets". 

The Panellists taking part were Ami Ben-David, Founder and CEO of Ownera; Austen Appleby, Senior Product Manager – Interoperability at R3; Edward Glyn, Managing Director and Head of Global Markets at Calastone; Emma Landriault, Vice President, Incubation and Architecture at J.P. Morgan Onyx Coin Systems; Jørgen Ouaknine, Global Head of Innovation and Digital Assets at Euroclear; and Lisa McClory, Digital Technologies Lead at D2 Legal Technology.

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This episode is a summary of Panel 3, titled "Reasons other than lack of digital money that explain why tokenised securities and funds have failed to scale". 

The Panellists taking part were Jochen Metzger, Global Head of Markets at NowCM Group and CEO at NowCM Finance; Muneeb Shah, Head of Digital Assets Technology consulting at EY UK; Kushal Balluck, Senior Manager, Digital Securities Sandbox and Post Trade Innovation at the Bank of England; Soren Mortensen, Director, Global Financial Markets, at IBM; and Valérie Gilles Chief Commercial Officer and Partner at IZNES.

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This episode is a summary of Panel 2, titled "Can securities and funds token markets can grow without genuine digital money on-chain?". 

The Panellists taking part were Damien Fontanille, Head of Business Development at Société Générale-FORGE; Jason Webb, Director of Web 3 at SS&C Technologies; Ben Brophy, Head of Blockchain at Fidelity International; and Daniel Coheur, Co-founder and Chief Commercial Officer (CCO) of Tokeny.

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This episode is a summary of Panel 1, titled "Why are the tokenised securities and fund markets failing to scale?".

The Panellists taking part were Stefano Dalavalle, Head of Product – Digital Assets at R3; Sean Mullins, Senior Vice President - Digital Assets and Financial Markets at Northern Trust Corporation; Stephen Whyman, Head of Debt Capital Markets, EMEA at Fidelity International Ltd (FIL); Sara Hall, Partner at Walkers; and Natasha Benson, COO/CFO at Ownera.

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The Apex Group has grown from an idea in the minds of two people in Bermuda just over 20 years ago to a global fund administration business employing 13,000 people across 112 offices around the world to look after assets under administration worth more than US$1 trillion. Such rapid expansion by acquisition was made possible by the support of major private equity investors – they include Genstar, Carlyle and Mubadala – but Apex is more than a classic roll-up story. The firm has retained its original bias to alternative strategies, but has moved far beyond fund accounting, transfer agency and management company services to embrace capital introductions, depositary and custody services and an Environmental, Social and Governance (ESG) ratings and advisory service. But what really distinguishes Apex from other fund administrators is its embrace of new technologies in general and blockchain technologies in particular. It has not only supported several tokenised fund issues but invested in a tokenisation engine (the Luxembourg-based Tokeny) and in the London-based FundAdminChain (which began as a fund tokenisation platform but morphed into an automated investor due diligence checking and on-boarding service). No other fund administrator has shown a comparable level of material commitment to a tokenised future for the funds industry. As Dominic Hobson, Co-founder of Future of Finance, found out when he spoke to Apex Group founder and CEO Peter Hughes and Head of Digital Assets Bruce Jackson, the enthusiasm of the senior management for tokenisation is not about intellectual curiosity but long-term survival and success. 

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A Future of Finance interview with Robert Koller, co-founder and CEO at NowCM, and Jochen Metzger, Global Head of Markets at NowCM.

The bond and money markets have emerged, for different reasons, as early targets for transformation through the application of blockchain technology. Although the illiquidity of the corporate bond markets in particular is a tempting target for blockchains and tokenisers, several new ventures have aimed instead to improve the notoriously under-digitalised primary market issuance process. A number, despite the materiality of the opportunity, have failed already. But survival is not the only risen why the stealthier rise of NowCM is of interest. The reasons behind its steady success so far include a focus on solving primary market inefficiencies with accurate data rather than process-transforming technology; a commitment to an open rather than a closed network that attracts other specialist service providers and facilitates unthreatening partnerships with both established debt market networks and other start-ups; a recognition that it is wiser to work with the incumbent sell-side intermediaries rather than against them, not least because the buy-side continues to want them to be involved; a preference for conventional technologies that minimise the cost and complexity of connecting users and delivering services; and, lastly, a number of astute acquisitions that have secured solid revenues as well as valuable technology and useful client relationships. Dominic Hobson, co-founder of the Future of Finance, spoke to Robert Koller, co-founder and CEO at NowCOM, and Jochen Metzger, formerly a senior official at the Bundesbank who is now Global Head of Markets at NowCM, about the origins, products, strategy and growth plans of a business that describes itself as both a “data company” and a ”new era market infrastructure.”

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With the acquisition in October 2023 of Securrency, a FinTech that specialises in the development of blockchain technology for regulated financial institutions, the Depository Trust and Clearing Corporation (DTCC) signalled the end of the experimental phase of its engagement with digital assets. That phase dated back to at least December 2015, when DTCC joined the Linux Foundation Hyperledger project. That was quickly followed by participation in the US$60 million Series A fundraising by Digital Asset Holdings in January 2016, and publication the same month of a white paper on blockchain that warned of the potential “generational disruptive force” of blockchain. DTCC has maintained its interest in blockchain ever since, notably via the launch in November 2021 of DSM, an infrastructure to support the tokenisation of privately managed assets. But the Securrency acquisition gives the clearing and settlement infrastructure the tools it needs to move beyond narrow asset classes and Proofs of Concept (PoCs) and Pilot Tests and actually build an open tokenisation infrastructure for the whole of the American capital markets: a blockchain platform, a tokenisation engine, a smart contract engine, a digital asset custody service, programmable token capabilities, off-chain storage of ledger data and digital identity information, and a set of tools to ensure assets remain compliant as they travel across the digital asset eco-system. The Securrency acquisition also brought to DTCC Nadine Chakar, a senior and experienced securities services executive with an attested appetite for innovation who had joined the firm as CEO only nine months earlier from State Street, where she was Head of Digital. Her appointment as Global Head of DTCC Digital Assets is a boost for those who believe that the key to unlocking the potential of tokenised assets is open infrastructure. To find out if those hopes are justified, read, listen or watch Future of Finance Co-founder Dominic Hobson interviewing Nadine Chakar.

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After Bitcoin first appeared in 2009 extravagant claims were made for its benefits. It would replace fiat currency as the money used by consumers in day-to-day transactions. Bitcoin would hold its value in a way that no fiat currency, being issued by central banks and intermediated by commercial banks, will ever manage. The centralised institutions profiting from the prevailing system of finance would all be disintermediated, giving way to a series of decentralised peer-to-peer networks that had no need of formal structures of trust or explicit measures to protect personal privacy. 15 years on, Bitcoin is a US$1.25 trillion speculative asset, which has proved spectacularly its uselessness as form of money and a means of disintermediation. Yet Bitcoin has remained surprisingly immune to searching criticism, in large part because its cheerleaders in social media and elsewhere have drowned out or ridiculed dissenting voices, and waged a successful (if ironic) campaign to turn Bitcoin into a respectable asset worthy of the attention of regulated banks and savings institutions. The success of these efforts in driving the value of Bitcoin upwards at a compound annual rate of 172 per cent since 2011 has not only made some of those voices extremely rich but made it hard for critics to build a sustained as well as coherent critique of the cryptocurrency. But since he published, in November 2022, “Bitcoin’s last stand,” the first of several papers questioning the economic rationale of Bitcoin, Jürgen Schaaf, an economic adviser to the European Central Bank (ECB), has developed exactly that. He spoke to Future of Finance Co-founder Dominic Hobson.

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What topics will be discussed?

What is the difference between asset-backed and genuine tokenisation?

What explains the current preference for asset-backed tokenisation?

What new products and services does genuine tokenisation make possible?

In what ways does genuine tokenisation threaten current intermediaries?

What new opportunities does genuine tokenisation create for current intermediaries?

Are asset managers, issuers, investors and regulators supportive of change?

Do securities and fund laws and regulations have to change to accommodate genuine tokenisation?

Does genuine tokenisation require fiat currency in digital form?

What technologies will underpin the future of digital asset issuance, trading and servicing?

Who or what will make change happen?

Who is on the panel?

Rajeev Tummala, Head of Digital and Data at HSBC Securities Services

Stefano Dallavalle, Head of Product, Digital Assets at R3

Ami Ben-David, Founder and CEO at Ownera

Ralf Kubli, Board Member at Casper Association

Moderated by Dominic Hobson, Co-Founder at Future of Finance

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The Regulated Liability Network (RLN) embodies an idea of the future of money that, unlike most conceptual novelties in the field, has become more voguish rather than less since it was first unveiled in a white paper of November 2022. In fact, the RLN can lay claim to have pioneered an approach to scaling the tokenisation of assets that has captured the interest of supranationals and central banks. The white paper may have coincided with the International Monetary Fund (IMF) advancing the idea of an “X-C platform” but it appeared months before the Bank for International Settlements (BIS) outlined its notion of a “unified ledger” or “single programmable platform” and the Monetary Authority of Singapore (MAS) announced it was working with four banks on Global Layer One (GL1), an open digital infrastructure to host tokenised financial assets and applications. But it would be a mistake to label the RLN as avant-garde. It is based in a sound understanding of the classic theory of computation and aims unashamedly to preserve fiat currencies and their twin variants of commercial and central bank money as the foundations of the financial systems of the future. Its design for a common settlement infrastructure for tokenised money also bears an uncanny resemblance to the way payments are settled today, in terms of intermediation as well as technique. Which is why RLN might just be adopted widely once banks understand its design. Dominic Hobson, co-founder of Future of Finance, spoke to Tony McLaughlin, Managing Director, Emerging Payments and Business Development at Citi Treasury and Trade Solutions, and one of the 11 industry leaders that contributed to the development of the original idea of the RLN.

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A Future of Finance interview with Gilbert Verdian, CEO of Quant

• Incumbent financial institutions did initially retard progress towards large and liquid digital asset markets, by investing in a discovery process rather than commercial opportunities, but appreciation of the cost savings and the revenue and profit gains available from investing in and trading digital assets is now widespread, as the enthusiasm for spot Bitcoin ETFs showed.

• The criticism that most tokenisations so far have limited benefits because they are asset-backed rather than digitally native under-estimates the value of bundling and unbundling tokenised assets into new instruments and fails to recognise that tokenisation has yet to impact the global bond and equity markets in a significant way at all.

• Asset managers are in a powerful position to drive progress towards tokenisation because they have much to gain from reduced costs of investment and increased diversification of returns, and the downward pressure they are experiencing on ad valorem fees mean they also have strong incentives to push the investment banks to offer them alternatives.

• Policymakers and regulators are also in a powerful position to encourage adoption of tokenised assets by working with the private sector to devise legal and regulatory regimes that encourage the issuance of digital assets and attract institutional investors to purchase them, creating a virtuous circle that catalyses the growth of digital assets everywhere.

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A Future of Finance interview with Gilbert Verdian, CEO of Quant

• Inter-operability between blockchain networks, and between blockchain networks and traditional financial markets, is essential to overcome the isolation of digital asset and traditional asset markets and so fuel their liquidity and growth, and the digital finance system must be designed and built from the outset with inter-operability at its core. 

• Proprietary solutions to the inter-operability problem cannot build inter-operability into the new digital finance system from the outset, so institutions in the private and the public sectors must work together to co-design and then co-build standardised infrastructures that enable tokens to be ported seamlessly between networks at the local, regional and global levels. 

• The financial market infrastructures that serve traditional assets at the pre-trade, trade and post-trade levels cannot be replaced overnight but must be integrated into the new digital financial market infrastructures, where they will persist only until the cost of maintaining them exceeds the costs of investing in the more efficient and service-rich digital alternatives.

• A unified ledger, or single programmable platform, of the kind outlined by the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and the Regulated Liability Network (RLN), will develop in layers as standardised national and regional platforms are built through private-public collaboration and start to inter-operate on a global scale.

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In October this year, Digital Asset will celebrate the tenth anniversary of its foundation. Under the flamboyant leadership of Blythe Masters, who was CEO from 2015 to 2018, no start-up did more to promote the potential impact of blockchain technology on the capital markets. Over the five years that have passed since she stepped down, Digital Asset has transformed itself from a pioneer of institutional-grade blockchain technology for financial market infrastructures into a provider of tools for building the smart contracts that enable assets to be tokenised, and a sponsor of the public but permissioned Canton Network blockchain network. Above all, it survived unscathed the cancellation of the flagship ASX contract, won in January 2016, to rebuild the post-trade infrastructure of the Australian stock exchange. Though the current strategy can be portrayed as a pivot away from the grand visions of 2016, the company has remained remarkably consistent in its (eponymous) belief that one day all assets will be digital, and that blockchain will provide a secure technological foundation for a network of networks that will encompass tokenised securities, funds, private equity, real estate, privately managed assets, commodities, rights and royalties, and collectibles. Dominic Hobson, co-founder of Future of Finance, spoke to Yuval Rooz, co-founder and CEO of Digital Asset, and Eric Saraniecki, co-founder and head of strategic initiatives at Digital Asset, about the history of the company, its products, the use-cases it has found and exploited, the thinking and the strategy behind the Canton Network, and the challenges the digital asset industry has still to overcome.

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A Future of Finance interview with Gilbert Verdian, CEO of Quant

• Settlement of digital assets without fiat currency being available on blockchain networks is problematic, and central bank digital currencies (CBDCs) remain a distant prospect, but commercial banks are increasingly excited by the efficiency savings and service enhancements made possible by the programmability of digital money, including tokenised deposits.
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• Claims that money is already digital ignore the fact that payments require push-and-pull exchanges of data to complete transactions, whereas truly digital forms of money enable the sequence of actions that complete a transaction, such as financial crime checks and the availability of money in an account, to be programmed into the digital money itself.
• 
  
• Cryptocurrency will continue to exist as a speculative investment, though institutional investors will favour regulated cryptocurrencies and cryptocurrency investment vehicles such as the spot Bitcoin Exchange Traded Funds recently authorised in the United States, and the regulated variety of cryptocurrencies can be expected to drive out the unregulated varieties.

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A Future of Finance interview with Gilbert Verdian, CEO of Quant

• The time in which regulators observed rather than intervened in digital asset markets is now over, and regulators are starting to work with the private sector to design effective regulations that match the pace of technological development, but progress would be much faster if a single regulator was given responsibility for digital finance.

• The reliance of traditional finance on national forms of regulation is ill-suited to the genuinely global and highly mobile digital asset markets, as the constant migration of cryptocurrency exchanges in search of accommodating jurisdictions proved, so a major jurisdiction needs to establish a minimum standard all jurisdictions can support. 

• The principal benefit of regulatory sandboxes is not to produce Unicorns or drive the reform of existing regulations but to prove that existing regulations are adequate to the task of regulating digital assets, which is of greater value to institutions that are regulated already than to new market entrants whose businesses test existing regulations. 

• Experience has shown that existing frameworks of law are adaptable to novel conceptions of property such as natively digital assets, but at this nascent stage in the development of the digital asset markets, the flexibility of the law is less important than a clear line between what is acceptable within the law already and what must await the further evolution of the law.

• Governments can influence the rate of growth of the digital asset markets directly by encouraging equity investment in smaller companies and issuing government bonds in tokenised form, which would have knock-on effects in encouraging atomic settlement using tokenised central or commercial bank money as the cash leg of the transaction.

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Tokenbridge is a software company which has embraced a tokenised future for the mutual funds industry. Its founders, all of which have long experience of the traditional funds industry, believe tokenisation can make funds cheaper to issue and service but – unlike most blockchain-based start-ups in the industry - their vision has less to do with cutting the costs of production and operation and more to do with widening distribution. The blockchain-based system Tokenbridge has built offers issuers of funds (fund managers) and distributors of funds (wealth managers) the software tools to make tokenised funds easier to find, compare and buy through a single app (aggregation) and in forms and combinations that better suit the needs of the investor (personalisation). The company strategy is based on the conviction that using digital technology to transform how funds are distributed is not a nice-to-have. The Boomers that dominate fund ownership today are yielding to a post-Internet generation that expects investment advice, and fund purchase and sales processes and reporting, to be digitised. Delivering this, especially to portfolios of modest value, cannot be done without transformative technology. Yet fund managers and distributors that fail to use technology deliver a full and compelling digital experience, warns Tokenbridge, will enjoy a smaller share of a global marketplace that tokenisation will enlarge massively. Dominic Hobson, co-founder of Future of Finance, spoke to Stephen Ashurst, CEO of Tokenbridge, about how to apply the experience of the past to building a bridge to the future that does not require a revolution today.

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IZNES is a marketplace that enables issuers of funds (asset managers) and institutional investors in funds (such as insurance companies and fund distributors) to sell and buy and service funds in tokenised form on a Cloud-based private, permissioned blockchain. To avoid the build-it-and-they-will-come fallacy, IZNES has solidified its relationships with leading insurance and asset management companies by offering them equity stakes in the business. The strategy has obviously worked, because IZNES has already attracted 18 institutional investors and 36 asset management companies and has €18 billion of funds registered on its marketplace, and its platform is supporting both assert-backed and native fund tokens. Because its target audience is institutional, and institutions prefer to deal with regulated entities, IZNES has secured regulatory licences from two French regulators and used these to passport its services into other major European fund jurisdictions, including the two main fund servicing centres of Ireland and Luxembourg. The firm has also concentrated on providing services that alleviate obvious pain points in the funds industry such as entitlement allocation and distribution and especially the onerous on-boarding and regular customer due diligence checks needed to meet Know Your Client (KYC), Anti Money Laundering (AML), Countering the financing of Terrorism (CFT) and sanctions screening obligations. The longer-term plans include the development of a secondary market in funds, initially to support the less-than-liquid infrastructure funds now being encouraged by regulators. Dominic Hobson, co-founder of Future of Finance, spoke to Christoph Lepitre, chief executive officer (CEO), and Valerie Gilles, chief commercial officer (CCO), at IZNES.

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What topics will be discussed?

What are the costs of a fragmented post-trade infrastructure in Europe?

What explains the continuing settlement inefficiencies of Europe, despite the introduction of T2S?

What has prevented the CSDs of Europe consolidating in the past?

Is the current ownership structure of European CSDs conducive to market-led consolidation?

Can a single programmable platform (a sort of Ethereum for CSDs) achieve the same effects as a single European CSD?

What part does blockchain technology have to play in improving the post-trade infrastructure of Europe?

Is the EU Pilot Regime a flop and will the UK Digital Securities Sandbox be one too?

Will pressure to settle on T+1 accelerate or decelerate change in European post-trade infrastructure?

Are there helpful technical solutions (e.g., “atomic” settlement, using AI and predictive analytics help improve settlement rates) short of consolidation?

What is the fastest way to a more efficient set of CSD services for the European capital markets – consolidation, cooperation and collaboration, regulatory intervention, market-led competition or technology?

Who is on the panel?

Dirk Loscher, Member of the Executive Board at Clearstream https://www.linkedin.com/in/dirk-loscher-9220b6248/

Chris Richardson, CEO at Percival Software https://www.linkedin.com/in/chris-richardson-26842923/

Andrea Tranquillini CEO Advisor at EDAA https://www.linkedin.com/in/andreatranquillini/

Bill Meenaghan CEO at SSimple https://www.linkedin.com/in/billmeenaghan/

Martin Watkins CEO at Montis Group https://www.linkedin.com/in/martinwatkins1/

Moderator: Dominic Hobson, Co-Founder at Future of Finance https://www.linkedin.com/in/dominic-hobson-49b8222/

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AsiaNext, a 24/7, Singapore-based institutional-only digital asset trading platform, opened for business in January 2024. Owned by the Swiss stock exchange (SIX) and SBI Holdings of Japan, AsiaNext emphasises its sound governance and regulatory compliance, which its owners and management believe are the keys to attracting institutional money. The new exchange has already secured two operating licences from the Monetary Authority of Singapore (MAS) and has applied for a third. But easily the most striking ambition of the new exchange is its commitment to a global strategy, in which AsiaNext will form a triad with the Swiss Digital Exchange (SDX, owned by SIX) in Zurich and Osaka Digital Exchange in Japan (where SBI is a major shareholder). To make a reality of this ambition, much depends on the behaviour of others. Technologists must create the tools to facilitate the transfer of digital assets between platforms (interoperability) and central banks must provide the trusted, on-chain fiat currency (CBDCs) to pay for them. But AsiaNext is moulded in the image of its parents and its management does not hesitate to speak of ten-year time horizons as well as the returns that are waiting to be collected on the investment in radical change. Dominic Hobson, co-founder of Future of Finance, spoke to Neil Thomas, Chief Commercial Officer of AsiaNext, about the origins, character and destiny of the first self-consciously global digital asset trading venue.

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What topics will be discussed?

1. At what pace are regulated custodian banks approaching the digital asset opportunity?
2. How important is custody to the unexpected success of Germany in tokenising and digitising issuance?
3. How large a factor is SAB 121 in deterring the engagement of American custodian banks in digital asset custody?
4. What does the proposed “safeguarding rule” introduced by revisions to the 1940 Investment Advisers Act mean for custodian banks?
5. What do registrations to provide custody services tell us about the evolving structure of the industry?
6. Why is it so hard to obtain a licence to provide custody services?
7. Why are digital asset custodians so enthusiastic about professional certifications?
8. Are custody markets, regulators and providers aligned on the ultimate destination?

Panellists

Tariq Rasheed, Partner at Reed Smith https://www.linkedin.com/in/tariq-zafar-rasheed-81b22018/

Thilo Derenbach Head of Sales & Business Development Digital Securities Services at Clearstream https://www.linkedin.com/in/thilo-derenbach-2102031/

Marius Lunding Smith Director Strategy and Growth at Finoa https://www.linkedin.com/in/mariuslundingsmith/

Mark Mayerfeld Chief Revenue Officer at GK8 https://www.linkedin.com/in/mark-mayerfeld-0566874/

Moderator: Dominic Hobson, Co-Founder of Future of Finance https://www.linkedin.com/in/dominic-hobson-49b8222/

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21X is a Frankfurt-headquartered token issuance, trading and settlement platform built on blockchain technology, and underpinned by a group of long-term investors, that expects to be the first to receive a licence to operate under the EU DLT Pilot Regime that allows operators of market infrastructures to test blockchain technology in the issuance, trading and settlement of tokenised financial instruments. The boldness of the company strategy is evident in its preference for a public, non-permissioned blockchain network, and the fullness of its commitment to automating as many functions as possible by the use of smart contracts. That said, the founders of 21X are astute enough to recognise that it will be easier to attract issuers and investors by working with rather than against the incumbent institutions that currently own those relationships, and within the regulatory frameworks that institutions prefer. They are confident that the shareholders of 21X support their long-term strategy and that the regulators would like to see the business succeed and thrive within the parameters set by investor protection and financial stability. Interestingly, 21X has also chosen Germany, the surprising market leader in digital asset market innovation in Europe, as its initial base of operations. Dominic Hobson, co-founder of Future of Finance, spoke to Max Heinzle, CEO of 21x, about where the company came from, where its I now, and where it intends to be in five years’ time.

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Success in tokenising equity is unusual. Most issues of tokens are asset-backed versions of existing bonds or fund shares. So the fact that Zurich-based token platform Aktionariat has succeeded in attracting a variety of small company issuers is a considerable achievement. The goal of the firm is to help start-ups and SMEs, initially in Switzerland but eventually around the world, raise equity capital from third parties at low cost. Its strategy is to reduce dramatically the costs of issuance and post-issuance operations such as settlement and registration. Aktionariat has also formed a string of partnerships with specialist service providers and with SDX, the digital arm of the Swiss stock exchange, which helps the company secure access to the clients of the Swiss private banks. An ingenious liquidity model, based on the principal-based trading of shares in mutual funds, meant that by the end of 2022 Aktionariat was already host to 29 issuers, had as many companies again preparing to issue, and had identified dozens more on a target list that ultimately spans the entirety of the enormous Swiss private company market. Dominic Hobson, co-founder of Future of Finance, spoke to Nicola Plain, CEO of Aktionariat, about where the company came from, what it has achieved so far and what it plans to accomplish in the future.

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What topics will be discussed?

Is regulation intended to restore public confidence in cryptocurrencies or destroy it?

Are CBDCs in major currencies ready to move beyond the experimental stage?

Are CBDCs a workable solution to inefficiency in cross-border payments?

Are CBDCs relevant to making domestic payments faster?

Are Stablecoins now a relic of the cryptocurrency past?

Are tokenised deposits a glimpse at the future of commercial bank money?

Is atomic settlement a flawed concept?

Why is netting making a comeback?

Where do Fnality, Partior and the ideas of The Regulated Liability Network (RLN) fit into the future of money?

Has T+1 accelerated or postponed the payments revolution?

Is tokenised, programmable money a reality already?

Could all forms of digital money and digital assets be issued, traded, stored and serviced on a common, programmable platform?

Who is on the panel?

Matthew Osborne

Senior Manager for Payments Policy at Bank of England https://www.linkedin.com/in/matthew-osborne-49552716/

Jack Fletcher

Head of Policy and Government Relations (Digital Currencies) at R3 https://www.linkedin.com/in/jack-fletcher-465060101/

Mathias Studach

Head Finance, Risk and Organisational Development at SDX https://www.linkedin.com/in/mathias-studach-77a427a0/

Moderated by Dominic Hobson

Co-Founder at Future of Finance

https://www.linkedin.com/in/dominic-hobson-49b8222/

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What topics will be discussed?

1. Carbon taxes are a mess (e.g., fossil fuels are subsidised as well as taxed, and at differential rates). Is that good or bad for the carbon credit market?
2. What is preventing the carbon credit market from growing?
3. Registries do not seem to have solved the integrity problem in carbon credit markets. What can (e.g., the ICVCM Core Carbon Principles (CCPs))?
4. Which bodies – securities or futures or commodities regulators – should regulate the carbon credit markets?
5. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) advocated “core” carbon spot and futures contracts as “reference contracts” for other carbon credits. Has that idea progressed?
6. Can and should carbon credit contracts be standardised?
7. Can existing securities and commodities market infrastructures play a role – or is a completely new infrastructure required?
8. How might carbon credit markets can be linked to ETS markets, potentially enhancing liquidity?
9. Is tokenisation an appropriate technology for the carbon credit market?
10. Does it make more sense to issue carbon credits natively on to a blockchain or to tokenise existing carbon credits?
11. Is the lack of digital money a problem in the tokenised carbon credit markets as it is in the other token markets (and, if so, are Stablecoins an answer?)
12. What might the carbon credits market of the near future actually look like?
13. How durable are carbon credits as an asset class? To what extent are asset managers and asset owners deluding themselves that sustainable investing can also deliver high returns (echoing politicians that dress up costs as benefits)?

Who is on the panel?

James C. Row, Founder and Managing Partner at Entoro Capital, LLC, a middle-market, traditional and alternative investment bank based in Houston, Texas, and CEO of Capturiant. 

Deanna Reitman, Partner Head of Carbon and Commodities at DLA Piper

Sean Mullins, Senior Vice President – Digital Assets and Financial Markets at Northern Trust 

Gbemi Oluleye, Assistant Professor (Lecturer), at Imperial College London

Moderated by Dominic Hobson, Co-Founder at Future of Finance

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R3 first came to public attention in 2015 when a group of major financial institutions and technology vendors backed the company to work out how blockchain technologies could be applied to regulated financial markets. More than six years on, R3 is the established enterprise software company behind a host of live and soon-to-be-live blockchain-based networks across multiple asset classes. In that time, its founders have learned a great deal about how regulated financial institutions think about and adopt blockchain technology, the balance that must be struck between competition and collaboration, the importance of inter-operability between networks and how to build a business case within a major financial institution. Dominic Hobson, co-founder of Future of Finance spoke to two of the founders of R3, Chief Technology Officer Richard Brown and Chief Strategy Officer Todd Mcdonald, about their experience and their expectations for the future.

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Financial market infrastructures (FMIs), from exchanges through central counterparty clearing houses (CCPs) to central securities depositories (CSD), must maintain a difficult balance between regulatory compliance, technological stability and operational resilience and the need to expand capabilities, contain costs and future-proof their franchises through technological transformation. A recent survey of post-trade developments, published by Nasdaq in conjunction with ValueExchange, found FMIs and their clients wrestling with what might be called the Tancredi Test: “If we want things to stay as they are, things will have to change.” Dominic Hobson, co-founder of Future of Finance, spoke to Gerard Smith, vice president and head of product-digital assets, at Nasdaq (Marketplace Technology), about what the survey tells us of FMI responses to budget constraints, user demands, T+1, AI and blockchain technologies and tokenisation.

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Data is now at the heart of every efficiency initiative in financial services: investing, trading, operations, risk management and compliance. The advent of blockchain and artificial intelligence (AI) and machine learning (ML) technologies are altering the nature of the relationship between data and technology, even as they make it easier to solve some age-old problems in data aggregation and management. Peter Gargone is CEO of Ntier Financial Services, a company he set up more than 20 years ago after experiencing at first hand the challenges investment banks faced in managing and using their data. Dominic Hobson, co-founder of Future of Finance, spoke to him about how regulatory demands are revealing new opportunities in the processing and integration of both internal and external data.

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Regulated banks are waking up to the threats and opportunities created by the decision to bring Stablecoins within the regulatory perimeter. In both domestic and international payments and securities markets, regulated Stablecoins offer liberation from the status quo as well as the threat of disintermediation. Where doing nothing is not a survivable option, understanding exactly what is going on is essential to the formulation of a viable strategy.

What topics were discussed?

1. Have Stablecoins escaped their origins in the cryptocurrency markets?
2. What makes Stablecoins unstable?
3. Are Stablecoins a vector of contagion that threatens financial stability?
4. How do tokenised deposits differ from Stablecoins?
5. How do Stablecoins create credit?
6. Could Stablecoins develop into a shadow banking system?
7. How will Stablecoins inter-operate with central bank digital currencies?
8. For banks, are Stablecoins friend or foe?
9. Do Stablecoins threaten non-bank incumbents in the payments industry?
10. How are Stablecoins being regulated in the major financial centres?
11. What is the capital treatment of Stablecoins?
12. Must non-bank issuers of Stablecoins secure banking licences?
13. Are Stablecoins the future of international and/or domestic payments?
14. Are Stablecoins the key to the growth of tokenised digital assets markets?
15. Are Stablecoins an end-state or an intermediate stage in the evolution of money?

Download the Future of Finance Stablecoins Paper Now

The panel

Gilbert Verdian CEO at Quant https://www.linkedin.com/in/gverdian/

Amarjit Singh Partner | EMEIA Assurance Blockchain Leader | Financial Services at EY https://www.linkedin.com/in/amarjit-singh-jeet/

Ricardo Correia Senior Technology Executive at R3 https://www.linkedin.com/in/ricardo-m-correia/

Keith Bear Fellow at the Centre for Alternative Finance at Judge Business School, University of Cambridge https://www.linkedin.com/in/keith-bear-2b7407/

Moderated by Dominic Hobson Co-Founder at Future of Finance https://www.linkedin.com/in/dominic-hobson-49b8222/

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Central bank digital currencies (CBDCs) originated in need (to put fiat currency on blockchain networks) but also fear. Central banks were fearful that private forms of money based on blockchain technology would rob them of control of national and international monetary conditions. These fears were crystallised by the prospect of Facebook issuing a multi-currency Stablecoin called Libra.

Having crushed Libra – whose remnants were sold to digital asset bank Silvergate in January 2022 – developed market central banks around the world are now bringing Stablecoins within the regulatory perimeter by privileging banks as issuers and prescribing what assets they can use to back a Stablecoin. This has released much of the pressure on the major central banks to issue CBDCs.

There are currently just four CBDCs actually in issue – the Bahamas Sand Dollar, the Eastern Caribbean Dcash, the Nigerian eNaira and the Jamaican JAM-DEX – and all are developing slowly, with limited take-up. Significantly, all four were issued in developing economies, where the benefits of CBDCs in promoting financial inclusion and fighting financial crime are easiest to capture.

Of another 93 countries exploring a CBDC – as monitored by the Atlantic Council CBDC Tracker – the most advanced (Brazil and Kazakhstan) fit the pattern. In all, just 17 are at the pilot testing stage. Of them, the Swedish eKrona project is the only one being pursued by a Western economy. 72 central banks are still developing or researching their plans, and the rest have stopped doing even that.

True, the Bank for International Settlements (BIS) website records ten CBDC experiments in progress, with various combinations of banks and central banks taking part, and it is not hard to find others where the BIS is not involved. So the leading central banks have not lost interest in CBDCs, but they do now seem relaxed enough to let the private sector lead the digitisation of money.

This reflects a consensus that a CBDC in a developed market must not disintermediate the commercial banks through which central banks influence monetary conditions. Nor are most central banks credible providers of customer-facing services such as digital wallets, foreign exchange and checking customers are not money launderers, terrorists or sanctioned businesses or individuals.

There is an even more profound sense in which central banks are content to cede the leadership role, and it is this: CBDCs are emerging as the foundation of a layered system of issuance and distribution in which asset-backed Stablecoins issued by regulated banks, tokenised cash on deposit at regulated banks and e-money backed by cash held at regulated banks will provide the bulk of digital monies.

To carry on reading, go to : https://futureoffinance.biz/is-this-how-cbdcs-will-happen-in-the-major-global-currencies/

Panellists

Ricardo Correia

Senior Technology Executive at R3

Gilbert Verdian

CEO at Quant

Barney Reynolds

Partner, Global Head Financial Institutions, Governance & Advisory at Shearman and Sterling

Keith Bear

Fellow at the Centre for Alternative Finance, Judge Business School at the University of Cambridge

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So, if it happens, tokenisation will either disrupt or transform or eliminate these functions. It is therefore both an existential threat and an exciting opportunity for CSDs. What tokenisation is not is something that CSDs can afford to ignore.

Attendees will hear speakers make the case for and against investing in tokenisation capabilities now. They will also be given the opportunity to vote on the Motion before the debate and again after the debate, to test whether minds were changed by the arguments.

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[1] See the interview with Stefan Bosshard, product head, fixed income, at  SDX, at: https://futureoffinance.biz/2022/02/16/sdx-explains-the-challenges-of-pioneering-a-regulated-digital-bond-issue/

[2] See the interview with Alex Smith, crypto product lead at SDX, at: https://futureoffinance.biz/2022/08/30/sdx-web3-services-non-custodial-ethereum-staking-service-is-live/o

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In this podcast, the coming tokenisation of the mutual funds industry will be discussed, in terms of the incentives to change, the techniques employed and the timetable by which it will proceed.

Whenever and however it happens, it will be a seismic transformation. According to the Investment Company Institute, there were at the end of June 2022 a total of 152,888 funds in existence around the world, worth a total of US$64.4 trillion.

And the case for change is powerful. Mutual fund managers face challenges of profitability which existing methods of efficiency – automation, outsourcing and offshoring - cannot solve.

It is why asset managers throughout the world – including eight leading organisations in London - are now investing in tokenisation, and not just of funds but of securities as a whole.

They sense that shifting funds on to a blockchain-based operating model will streamline the infrastructure that separates fund issuers from fund investors, cutting costs to the benefit of both.

It follows that existing intermediaries – such as transfer agents, fund accountants and fund platforms – must adapt their existing businesses to a tokenised future, or face extinction.

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Secure custody emerged early in the history of cryptocurrency markets as the main barrier to the entry of institutional investors. It remains the major obstacle to the engagement of traditional, long-only institutional investors in tokenised assets such as Non-Fungible Tokens (NFTs) and security tokens.

Even the more adventurous institutions pioneering trading and investment of tokenised assets – namely, hedge funds, wealth managers, exchanges, corporate treasuries, sovereign wealth funds and family offices – are now demanding custody services that are not only high-quality but regulated.

It is not hard to see why. The task of safekeeping the cryptographic public/private key pairs associated with a digital wallet that confer ownership and control of a tokenised asset requires the mitigation and management of risks that are different from those of traditional cash and securities custody.

Because they are used to store, manage and transfer tokenised assets, private keys also represent a single point of failure. In a traditional custody chain, by contrast, various intermediaries (brokers, depositories, clearing houses, custodians) reconcile holdings and transactions repeatedly.

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• Margin pressure exerted by institutional investors and passive investing means asset managers must cut costs but the methods used over the last 30 years – computerisation, outsourcing and offshoring – are no longer sufficient, partly because of rising regulatory costs. The asset management industry needs to move on to a new operating model. 
• If the asset management industry fails to adopt a new operating model, it risks being displaced by the Decentralised Finance (DeFi) industry. Despite reputational issues and a recent loss of value, DeFi protocols have experimented successfully with alternative models of capital-raising, trading and investing, and are attracting interest from asset managers.
• A further challenge facing the asset management industry is set by unavoidable generational change. Baby Boomers which saved via pensions, funds and housing are being replaced by Millennials and Gen Z, which are not only digitally native but alienated from all existing financial services providers, as their enthusiasm for tokenised forms of finance proves. 
• Tokenisation offers a new operating model. Instead of assets (such as securities) and cash (as payment) being moved between buyers and sellers by a complex eco-system of exchanges, brokers, clearing houses (CCPs), custodians, central securities depositories (CSDs), registrars and paying agents and their computer systems, tokens move between nodes on a network.
• Ultimately, finance is about the transfer of value through time. Its essence can be reduced to flows of value in which an asset is a purchase of future flows of value (an investment by investors) and a liability is a sale of future flows of value (an issue of equity or debt by an issuer). Financial services exist to facilitate exchanges between investors and issuers.
• It follows that intermediaries that facilitate exchanges of futures of flows of value between issuers and investors must add value or they will become vulnerable as forms of transactions costs only. In principle, tokenisation can dispense with intermediaries altogether, with issuers and investors holding self-servicing tokens on their nodes only. 
• Tokens differ from conventional financial assets. A conventional equity offers an uncertain promise of capital appreciation and dividend income. A fixed rate bond offers a certain income and a promise of redemption. Mutual funds are more like bonds than equities. What tokens offer is something simpler: a pledge to deliver a particular flow of value in the future.
• These pledges of future flows of value are made by token issuers to token investors. There are two variants. The first is a “native” token that exists in digital form only (as Bitcoin does). The second is a “title” token or a tokenised underlying analogue asset (such as a company share or a building or, in the case of a Stablecoin, cash and near-cash financial assets).
• Fulfilment of pledges of future flows of value can be automated by building intelligence into a token, making it a “smart token”. For example, when the date arrives to make a transfer of value such as a dividend or interest payment or rights issue or redemption, it triggers the token to deliver other tokens of the requisite value to the node of the holder of the pledge. 

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A distributed technology such as blockchain is well-adjusted to capturing, validating and then distributing data scattered across multiple databases, within as well as between institutions. It enables Inveniam to deliver the data needed to value private managed assets regularly, frequently and reliably without the need to centralise it in a single data warehouse.

The data garnered by Inveniam is used by orthodox valuation agents such as Cushman & Wakefield, CBRE, Houlihan Lokey, Mercer and others to mark privately managed assets to market on behalf of their buy-side clients. The data enables the valuation agents to provide a faster, more frequent and more reliable valuation service to their clients. 

Where privately managed assets such as real estate, infrastructure and private equity can be marked to market daily, weekly, monthly or quarterly, by an independent third party and at low cost through the use of technology to retrieve and process data from widely distributed and highly variegated systems, two-sided markets can develop to facilitate price discovery.

Accessible, reliable data improves valuations and makes two-sided markets possible, but liquidity ultimately depends on the engagement of market-makers with tokenised asset classes. They have already engaged with the cryptocurrency markets and can be expected to engage with the security token markets once issuance volumes gain sufficient momentum.

The emergence of two-sided markets on blockchain-based networks will attract issuers of privately managed assets and funds invested in privately managed assets in tokenised form, because better functioning markets will lower the cost of raising and servicing capital (for example, paying dividends). Estimates indicate savings of between 20 and 50 basis points.

Real estate will pioneer the tokenisation of privately managed assets in the United States because the impact of more accurate, frequent and independent valuations in reducing the capital financial institutions must allocate to the asset class is so dramatic. Similar benefits will accrue to holders of infrastructure and private equity investments as well.

Reliable valuation data also cuts the cost of fund accounting or calculating the Net Asset Value (NAV) of a fund. If the cost of the NAV is borne by the fund, it lifts returns. If it is borne by the management company, it widens margins for general partners (GPs). With independent valuations, it also becomes easier to post fund units as collateral for margin loans.

In the United States, the Decentralised Autonomous Organisations (DAOs) that issue tokens to raise funds and use smart contracts to service the tokens are now obtaining formal legal recognition. Three states have granted DAOs legal status and the leading jurisdiction for publicly traded corporations (Delaware) is expected to follow suit.

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Liechtenstein is one financial jurisdiction which has embraced the blockchain enthusiastically. It has since January 2020 had in place comprehensive legislation covering all aspects of tokenisation in the shape of the Token and Trustworthy Technologies Service Provider Act (TVTG). The Act is, says VP Bank, one of the factors that has made possible its own rapidly developing asset tokenisation service. The Lichtenstein private bank sees the tokenisation of collectibles in particular as a major new business opportunity in the immediate future – a work of art belonging to a client was tokenised earlier this year - and is already exploring the tokenisation of real estate and privately managed assets too. Dominic Hobson, co-founder of Future of Finance., spoke to Thomas von Hohenhau, Head of Client Solutions and a Member of the Group Executive Management at VP Bank in Liechtenstein, and Marcel Fleisch, Chief Product Officer at VP Bank.

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No one central bank digital currency (CBDC) is ever quite the same as another. But so far every CBDC project has focused largely on the technicalities of making payments – by or to unbanked consumers or businesses, or between counterparties across national borders, or to prevent consumers and businesses undermining the role of central banks by making payments with alternatives such as cryptocurrencies or Stablecoins. This has confined thinking to far too narrow a range, argues Vadim Sobolevski, co-founder of FutureFlow. He thinks CBDCs have the potential to transform not just the conduct of payments, or even monetary policy, but the implementation of economic and social policy itself. CBDCs, in his view, can and should be used to manufacture credit and direct liquidity precisely where they are needed. He spoke to Future of Finance co-founder, Dominic Hobson.

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Many business decisions are baffling. But on the face of it none is as bewildering as the decision by banks, asset managers, wealth managers, private banks, insurance companies and FinTechs to spend hundreds of billions of dollars a year on Know Your Client (KYC), Anti Money Laundering (AML), Countering the Financing of Terrorism (CFT) and sanctions screening checks that are not only expensive but useless. The answer is that regulated firms are buying insurance against the wrath of the regulators, and data vendors are delighted to provide it by plying them with high-priced but ineffective data on bad actors in financial markets. Dominic Hobson, co-founder of Future of Finance, asked Vadim Sobolevski, co-founder of FutureFlow, whether there is a better way.

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BSTX is the first exchange based on blockchain to be fully regulated by the Securities and Exchange Commission (SEC) and licensed to operate on a national scale. It took the founders of the Boston-based exchange years to get there but they were clear from the outset that fully regulated status is the key to success. It certainly makes it easier to engage regulated brokers and market-makers as well as institutional investors. So does allowing those trading firms to communicate with each other via the FIX protocol and clear and settle trades through the traditional securities and funds clearing house (NSCC) and the American central securities depository (DTC). Dominic Hobson, co-founder of Future of Finance, spoke to Lisa Fall, CEO, and Jay Fraser, Director of Strategic Partnerships at the Boston-based exchange.

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It is easy to portray the tokenisation of securities as a mortal threat to central securities depositories (CSDs). In principle, security tokens issued on to blockchain networks can dispense with all the core functions of a CSD in safeguarding the integrity of issues, maintaining a register of investors, settling transactions in central bank money, distributing entitlements and maintaining accounts for custodian banks acting on behalf of investors. That is why most of the discussion about the future of CSDs since the tokenisation of securities was first broached in 2018 has focused on the escape routes rather than the paths to the future. CSDs could appoint themselves operators or “governors” of the private, permissioned networks that looked likeliest to be adopted by incumbent financial institutions such as investment banks, custodian banks and asset managers. They could run the Know Your Client (KYC), Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and sanctions screening checks to filter the issuers and investors that aspired to belong to these networks. CSDs could offer their classic services to the new classes of asset-backed tokens that were expected to emerge from the real estate, fine art, fine wine and collectibles markets, by developing digital wallets and atomic settlement services. By these means, they could make even the Decentralised Finance (DeFi) markets safe for institutional money. Unsurprisingly, when confronted by such defensive tactics and a diverse range of options that were not strategically coherent. many CSDs seemed unable to act at all. Lately, a more positive outlook has become clearer. Central Bank Digital Currencies (CBDCs), by putting central bank money on to blockchain networks, appears to solve the biggest obstacle to settling security token transactions. Even the adventurous institutional investors, dabbling in crypto-currency and token investing for the first time, have made clear they prefer to do so in the company of regulated financial institutions and financial market infrastructures. At least some of the two dozen or so security token exchanges that have emerged incorporate a CSD function, partly because unreconstructed securities laws and regulation insist upon it, but mainly because institutional money feels more comfortable with it. At this webinar, Future of Finance joins forces with The Africa and Middle East Depositories Association (AMEDA) and sponsors Percival Software, a leading provider of CSD systems, to ask: Is tokenisation the nemesis or the apotheosis of the CSD?

Some of the topics to be discussed:

1. Will tokenisation of securities kill, maim or transform CSDs?
2. Does the current size of securities token markets argue for a masterful period of inactivity?
3. Has the idea of saving issuers and investors money by disintermediation died?
4. Are the costs of post-trade intermediation so high that they warrant disintermediation?
5. Which intermediaries are at greater risk of disintermediation than CSDs?

Panellists

Vipin Mahabirsingh, Managing Director at Central Depository & Settlement Co. Ltd

Chris Richardson, CEO at Percival Software

Andrea Tranquillini, Senior Post Trade Market Infrastructure Executive

Mark Smith, CEO and Co-Founder at Symbiont

Vic Arulchandran, Co-Founder at Nivaura

Moderator

Dominic Hobson, Co-Founder and Editorial Director at Future of Finance

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Opening branches in the Metaverse will test bankers as merchandisers

Wherever transactions occur, banks can almost always be found, transmitting money or exchanging monies. Nor is there any reason why the products being sold in the Metaverse (and they are sold rather than bought) should not generate sales of other financial products, such as insurance and asset management. However, unlike Facebook, traditional financial institutions have so far failed to convince themselves that they can profit from the Metaverse. Yet there are some obvious moves to make. The fact that Bank of America is using Virtual Reality (VR) headsets to make its salesmen and relationship managers more effective is not Metaversal: it is just a training aid of the type airlines and armies have used for years. But the next step is conspicuous: close physical bank branches, open virtual bank branches in the Metaverse and replace the flesh-and-blood salesmen and women with virtual reality avatars that customers can engage with instead. In fact, this move is so obvious that Kookmin Bank in Korea has already made it, and other Korean banks and brokers are following its example.

Find out more at:

https://futureoffinance.biz/2022/01/31/how-banks-can-make-money-in-the-metaverse/

Among the topics to be discussed at this webinar are:

Is there a sound definition of the Metaverse?

What does the Metaverse owe to the video-gaming industry?

Is the Metaverse best built on blockchain technologies?

Are crypto-currencies, Stablecoins, utility tokens, payment tokens, security tokens and Non-Fungible Tokens (NFTs) incidental to the Metaverse or central to it?

What financial services use-cases for the Metaverse are there?

How do those use-cases vary between (a) banks (b) asset managers and (c) insurers?

How can the Metaverse avoid becoming a series of walled gardens as opposed to a decentralised network of parallel but linked Metaverses?

How can standards best be developed to facilitate data exchange between Metaverses?

How serious an obstacle to progress are the headsets and sensors?

Does the technology currently support the production of compelling content, especially in terms of speed and scale?

What are the major engineering challenges that the Metaverse poses?

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NFT marketplaces offer art, collectibles, videos, music and sports

The fact that most NFTs are built on Ethereum is a major factor behind the surging transaction costs (“gas fees”) on Ethereum, and the associated interest in the low-to-zero transaction cost alternative of the Solana blockchain protocol. Most of the purchases made are intermediated by a newish breed of commission-based NFT marketplaces of which the biggest, OpenSea, is also built on Ethereum. The NFT marketplaces are akin to crypto-currency exchanges such as Coinbase but minus the custody function (unlike the crypto-currency exchanges, most NFT marketplaces expect investors to own and operate their own digital wallet) and plus (in the case of the most successful NFT marketplaces) a genuinely decentralised model. OpenSea, which currently lists more than 6,000 NFT collections, is the generalist option. Other NFT marketplaces (such as art marketplace Nifty Gateway, which is owned by cryptocurrency exchange Gemini, a parentage that enables provision of a custody service) focus on niches.

The NFTs available are not confined to unique digital collectibles such as Bored Apes (there are only 10,000 available) or Pudgy Penguins (8,888). Fine art, videos, music and physical objects are also available as NFTs. Artist Damien Hirst has sold 9,000 of 10,000 unique, hand-painted, dot-covered works on paper at a price of US$2,000 each. He has given buyers 12 months to decide if they wish to take ownership of the physical work or own the NFT instead. If they choose the NFT, the physical work will be destroyed. Secondary market trades have raised the total market value of the Hirst collection to more than US$500 million. The traditional art auctioneers, whose nose for anything that smells of money is as finely tuned as the most shameless investment bank, have moved into the market. Christie’s made US$150 million from NFT sales in 2021 (US$69.3 million of it from Everydays: The First 5,000 Days, a digital art collage by artist Mike Winklelmann, better known as Beeple). Sotheby’s made US$100 million from NFT sales in 2021, including from sales of Bored Apes.

Among the topics to be discussed at this webinar are:

Who invented NFTs?

What explains the recent growth of the NFT markets?

How can NFTs best be categorised?

What are the sources of value of an NFT?

What are the links between blockchain, crypto-currencies, tokenisation and DeFI?

Find out more at:

https://futureoffinance.biz/2022/02/02/the-good-reasons-and-the-bad-for-taking-nfts-seriously/

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The US$124 billion global bond markets seem at last to be taking pole position in the race to unlock the efficiencies conferred by blockchain technology. Much of the effort is directed at the primary markets, where the telephone plays the part it has since the 1960s and the fax and spreadsheet continue in the roles they stole from the telex and the pocket calculator in the 1980s. But the real prize in fixed income lies in the secondary market, and especially in corporate bond markets that have become a byword for illiquidity and price opacity. Enter LedgerEdge, a two-year-old start-up based on R3 Corda technology that is exciting the buy-side as well as the sell-side with its promise of a decentralised marketplace in which it will be possible to find and then buy and sell corporate bonds without expensive information leakage. After making rapid progress since its foundation in 2020, LedgerEdge has acquired its regulatory licence from the Financial Conduct Authority (FCA) in London and is on course for its UK, US and EU launches in the second and third quarters of 2022. Future of Finance co-founder Dominic Hobson spoke to LedgerEdge CEO and Co-founder David Nicol.

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Most tokenisation ventures start with technology, their spokesmen and women revel in its cost efficiency and process automation, and with Fusang’s ability to issue, trade, settle, and vaulting services, all housed in one end to end solution, that may indeed be true. It’s therefore not surprising that the aim of its founders is to connect even the smallest retail investors with the biggest issuers, giving the former access to asset classes previously reserved to the institutional realm.

If democratising investment through tokenisation sounds familiar, the enthusiasm of Fusang for using regulation to protect investors is much less predictable, Fusang exudes dependability as well as entrepreneurial energy evidenced by its drive to marry a culture of compliance and innovation. 

Dominic Hobson, co-founder of Future of Finance, asked Henry Chong, Founder and CEO of Fusang, about his vision of the future of investing and how the company plans to make it happen.

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The government of Gibraltar and the Gibraltar Financial Services Commission (GFSC) pride themselves on their closeness and accessibility to the industry, which they believe encourages a spirit of openness among regulated firms, but they are not an easy touch: it can take 12 months to get approved, and more licence applicants are disappointed than endorsed. Dominic Hobson, co-founder of Future of Finance, spoke to the Honourable Albert Isola, Minister for Digital and Financial Services in Gibraltar, about what licence-seekers can expect and where he thinks the next big opportunities lie.

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Since it opened for business in March 2018, Hex Trust has gathered a diverse clientele in the private banking, wealth management and asset management industries. Future of Finance co-founder Dominic Hobson spoke to Alessio Quaglini, CEO of Hex Trust, about how he sees the crypto-custody market developing as non-fungible tokens (NFTs) and security tokens are added to the list of eligible institutional investments.

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Now, the causal nature of decision-making is being challenged by a host of correlations. Of no market is this truer than the previously opinion-rich but near data-free zones of workforce management and office location, both of which the Pandemic has challenged at the elemental level. So the emergence of Vertis.ai, a market intelligence platform that aims to improve decision-making in the HR and commercial real estate industries by analysing billions of data points, could scarcely be more timely. Dominic Hobson, co-founder of Future of Finance, spoke to Sam Hocking, co-founder of Vertis.ai.

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The company is now automating data flows in the primary debt capital markets and nurturing the growth of the open-source General Legal Mark-up Language (GLML), a standard for digitizing documents. Next up is derivatives. Future of Finance Co-founder Dominic Hobson caught up with Scott Eaton, CEO, and Co-founder Dr Vic Arulchandran.

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That is because it is confidence in the safekeeping of the private keys that unlock ownership of crypto-currencies and security tokens that will determine the level of institutional investment in both. Polysign subsidiary Standard Custody & Trust has just raised more than US$80 million to build a blockchain-based, institutional-grade custody service for asset managers. Future of Finance co-founder Dominic Hobson spoke to CEO Jack Macdonald.

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FX has more than survived the disappearance of 19 national currencies into the euro and is even now drawing crypto-currencies into its orbit. One reason FX has retained its freebooting personality is the fact it is regulated everywhere (because banks are regulated) but nowhere. But the real secret of its continued riches is the continuing indifference of the biggest end-users – asset managers, institutional investors and corporates – to value for money in FX. Dr Jamie Walton, co-founder of Raidne, told Dominic Hobson how he is now using the techniques he mastered as a rates quant to help those end-users monitor and trim FX transaction costs and manage the risks of market manipulation and abuse.

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Though it is a consortium venture embracing seven firms in broker-dealing, automated trading, crypto-currency and FinTech, 1transfer is very obviously the brainchild of Houston-headquartered Entoro. The entire raison d’etre of the investment bank is to exploit the accelerating convergence between investment banking, private securities placement, trading and market making, wealth management, crypto-currencies and security tokens. In the light of that strategy, reinventing transfer agency makes perfect sense. Future of Finance co-founder Dominic Hobson spoke to Entoro founder and managing partner Jim Row about where 1transfer came from and where it is going.

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2. How can privacy best concerns be addressed?

3. What will the impact of CBDCs be on Stablecoins, crypto-currencies and digital assets more generally?

4. What can be programmed into a CBDC by (a) central banks and (b) private commercial banks?

5. What are the use-cases for a CBDC?

6. How can CBDCs best made inter-operable across national borders?

7. What opportunities do CBDCS create for banks to reinvent themselves?

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The authors show that the payments industry imposes a massive tax on all forms of economic activity, but for once the villains are not the banks, whose work in managing counterparty, settlement and liquidity risk they consider to be more than useful. 

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– Bond issuance on to distributed networks

– The on-chain trading of bonds between market participants

– The financing of bond market transactions in an on-chain repo market

– The use of bonds as collateral to secure commercial and central bank money

– Settlement of bond transactions on and off chain

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Alex Kech, the CEO of the Singapore-based cryptocurrency and digital asset custodian Onchain Custodian, has drawn on 22 years in the securities services industry with BNY Mellon and SWIFT to build a service that makes institutional investors comfortable about investing in the token economy. He spoke to Future of Finance co-founder Dominic Hobson about the current state and likely development of the security token markets, what could happen to traditional service providers and the importance of standardising data exchanges.

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1. How can digital technology help trade finance restore lost capacity?

2. What can regulators do to encourage digitisation?

3. What needs to be standardised in digital finance?

4. How can peripheral parts of the industry best be digitised?

5. Will the various digitisation initiatives in trade finance be consolidated by market forces alone?

6. What are the sources of data in trade finance that are valuable enough to be mined?

7. Do conventional trade finance banks have an incentive to capture and use the data they process and create?

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He spoke to Future of Finance founder Dominic Hobson about the difficulties of capturing novel, technology-based concepts in law and implementing them in regulation, the need for forms of reintermediation as well as disintermediation in digital asset issuance and investing, and how Liechtenstein can capitalise on its leading position before the Markets in Crypto-Assets Regulation (MiCaR) of the European Union becomes part of the law of Europe.

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Dr Thomas Dünser, director of the office of financial innovation of the Government of Liechtenstein and a member of the Supervisory Board of the BFG Blockchain Founders Group in the principality, told Dominic Hobson how intermediaries, issuers and investors are using the law to make a reality of the coming “token economy.”

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That is partly because pension fund trustees cannot simply choose what they believe to be right in terms of ESG. They must ensure the fund has sufficient assets to pay the promised pensions (in defined benefit, or DB, schemes) or maximise the value of the pension portfolio of the members (in defined contribution, or DC, schemes).

Trustees have somehow to demonstrate that they take ESG fully into account, without causing financial detriment to the fund. Needless to say, there is no shortage of investment consultants and asset managers willing to declare that this is a bogus dilemma, because ESG-driven funds will outperform in future years.

The “wall of money” ESG strategies are attracting may prove them right, even after taking into account the massive transactions costs of transitioning to an ESG-driven strategy.

But proving ESG credentials will take more than ditching managers that buy oil, mining, tobacco and firearms stocks and appointing managers that invest in renewable energy, or adding an ESG fund to the defined contribution pension plan roster, or signing up to the United Nations-backed Principles of Responsible Investment (PRI).

It will take data, not just to choose investments but to convince members and regulators that the fund is fulfilling its duty to take ESG seriously.

The Pensions Regulator (TPR) has told trustees that they ought to sign up to the Stewardship Code published by the Financial Reporting Council (FRC). Its purpose is to encourage the “responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.”

Trustees have since October 2019 had to include in their Statements of Investment Principles verbiage on how they vote at AGMs and how they engage with the companies they invest in – even though the switch to passive investing makes it virtually impossible for some funds to do this.

In addition, trustees must (since October 2020 for DC schemes from 1 October 2021 for DB schemes) report how they fulfilled their ESG responsibilities in the previous year, in online, publicly available statements.

Although there is no shortage of consulting services and ratings from the major investment consultants, and a wide variety of other products from data vendors, rating agencies, technology vendors and global custodian banks – many of which want asset managers as clients, not asset owners – the extent and quality of the data about ESG factors falls far short of what is required to make informed and convincing public statements.

This Future of Finance webinar will explore what ESG data is available, where the most serious shortcomings lie, and what is needed to fix them

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StepLadder is a fintech start-up currently embarked on a crowd-funding campaign to fuel its growth as a peer-to-peer borrowing and lending platform for first-time buyers. The company is currently growing its membership by 13 per cent a month and already planning to extend its techniques and technology beyond the housing market. Join the founders at our Future of Finance Case Study at 14.00 London time on Thursday May 6 to find out how they raised the money and built the market, and whether their peer-to-peer platform could help your business grow too.

To learn more about how StepLadder developed its personality and its business, and raised the funding to grow, join our Future of Finance Case Study at 14.00 London time on 21 April. Founders Lucy Mullins and Matthew Addison will both be there to tell their story and answer your questions.

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By 2018, a decade after the acute phase of the crisis, 11 major global banks alone had paid US$216 billion in fines for various breaches and misdemeanours. The banking industry as a whole had paid more than US$345 billion by then, according to Deloitte. No wonder Deloitte also found that compliance expenditure by banks had risen by 60 per cent since the financial crisis, and was still rising.

Regulations are not static, of course. Deloitte reports an average of 220 regulatory revisions a day, so keeping up with the changes alone is an onerous task for regulated firms, especially if they are operating in multiple jurisdictions, each with its different rules.

In reality, old-fashioned software-as-a-service (SaaS) from the Cloud plus application programme interfaces (APIs) to facilitate data exchanges have proved equally effective as enablers of regulatory automation. They can, for example, populate a regulatory report for checking prior to delivery to a trade repository.

RegTech is maturing. It is finding useful applications and starting to consolidate. Yet it continues to resist tidy definition. Deloitte divides a current total of 412 RegTech firms it monitors into five high level categories – Compliance, Risk Management, Identity Management and Control, Regulatory Reporting and Transaction Monitoring – which help to make sense of a broad range of activities.

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Metrobank has had a banking licence for more than decade now. Monzo (2015) and Starling Bank (2017) are the best recognised followers and fellow banking unicorn Revolut (2015) finally applied for a banking licence in January 2021.

If the multifarious payments and other apps fostered by the Open Banking initiative launched in January 2018 are added – there are over 300 of them – the United Kingdom retail banking market looks highly competitive.

In reality, it is not. The Big Four banks (Barclays, HSBC, Lloyd’s and RBS) still own 75 per cent of current accounts. The same is even more true of small and medium-sized businesses (SMEs). The Big Four own 85 per cent of business accounts.

An Open Banking Initiative survey of 500 SMEs, published in December 2020, found half were using open banking providers, but only because the Pandemic necessitated on-line banking service. Less than one in five (17 per cent) even of these SMEs had also switched their bank account.

The Bank of England has identified a funding gap of £22 billion for the 5.94 million SMEs in the United Kingdom, which currently obtain 84 per cent of their debt from banks. Few are able to shop around. In fact, one reason SMEs do not change their bank is that their chances of being rejected for a loan by a new provider are 50 per cent higher.

Unlike Germany (which has more than 400 full-service Sparkassen savings banks and more than 1,100 full-service cooperative Volksbanks) or the United States (which has 5,700 full-service community banks and more than 5,600 credit unions with assets of more than £1 trillion), the United Kingdom is dominated by publicly listed banks.

The first signs of structural change have now appeared, in the shape of new banks that believe they can lend with confidence to SMEs on the basis of tacit (and often local or regional) knowledge as well as the increasing volumes of hard data available in a rapidly digitising economy.

In theory, new banks with a good understanding of how to lend to SMEs will not only increase the supply of credit to SMEs, but increase the resilience of the banking system as a whole by broadening the size and type of bank, and make the structure of banking less pro-cyclical.

This Future of Finance webinar will explore with the leaders of some of the new banks, and with experts from countries with more diverse banking systems, whether it is not technology and data alone, but local and regional knowledge and relationship banking, that can build a more resilient, responsive, stable and innovative banking system for SMEs.

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How can a DataNet be realised most efficiently?

What role can government play in accelerating progress towards widespread adoption of digital IDs?

What can we learn from a comparison of the digital ID schemes in those jurisdictions which have adopted them already?

How can Open Data initiatives best be harnessed to the adoption of digital IDs?

What factors will encourage banks to take digital IDs seriously (in those countries where they have yet to do so)?

Which types of organisation are best suited to issue digital IDs and manage the associated information flows and data storage?

Where should liability for inaccurate, misleading or fraudulent identification information lie?

Is an internationally agreed set of digital ID and data profile standards desirable and, if so, how can they best be achieved?

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The recent investment by Ruffer in Bitcoin has captured headlines, but institutional money has followed the crypto-currency markets for years. Asset manager Fidelity launched a digital asset custody service as long ago as 2018. Mainstream banks, including BNY Mellon, Northern Trust and Standard Chartered are now following suit – precisely because their buy-side clients want to invest in the asset class.

However, while crypto-currency investing appeals to institutional asset managers as a commodity play and an inflation hedge, and their custodians are scrambling to support them, the crypto-currency markets are far from mature. In fact, they are full of complexities and risks that do not stop at volatile prices. Chief among them is compliance risk. It is easy for investors that do not understand such risks to lose their reputation as well as their money.

In this Future of Finance webinar Dominic Hobson will discuss with three crypto-currency converts, all of them veterans of the traditional capital markets, how they are enabling institutional asset managers and their advisers to strike the right balance between risk and opportunity in the crypto-currency markets.

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Payments still create significant costs in capital held for liquidity purposes. In what ways can the cost be reduced?

Cross-border payments are still not instant in most cases. How can a genuinely global instant payments network of networks be built?

The value of mobile telephone networks in connecting everybody to everybody is rich in further potential value for payments. How can it be realised?

What do payments market infrastructures and payment markets participants need to do to be ready for the Internet of Things?

What is the optimal method of achieving universal adoption of Digital Identities by consumers and companies?

In payments, are blockchain technologies and APIs rivals, complementary or entirely separate technologies?

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Why is data such a powerful tool for consumers?

How exactly does consumer control of data put companies under pressure to cut prices, innovate and personalise?

Is the data of sufficient quality and extent to achieve the vision of a digital economy driven by consumers granting access to their data?

Are banks (and energy and telecommunications companies) resisting Open Data?

What other sectors are vulnerable to an Open Data economy?

How should price comparison websites evolve their business model?

Can consumers be confident their data is transferred and held securely?

Why is consumer uptake of Open Banking in the United Kingdom so slow?

What other forms of data will become available (e.g. mobile telephone data, Internet searches etc.)?

Which countries are getting data regulation right (if any)?

Do we need a new international body to co-ordinate national data regulation?

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The relative importance of cost-cutting versus improved customer service

Whether finance is especially well-adapted to RPA and AI

Whether the projected savings are being achieved

Attitudes of employees towards the technologies

Impact on levels of employment and skill

Whether the IT department is a source of resistance to RPA and AI and ML

How it alters the threat of cyber-attacks

Current natural language processing capabilities

Difficulties in working with legacy systems

Whether RPA, AI and ML are merging into a single form of intelligent digital automation

What RPA and AI cost

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Asset management is not immune to the effects of the growing volume of data available in digital form, and the growing proficiency of Artificial Intelligence (AI) at analysing it. Portfolio managers have always relied on financial information and price data, and quantitative managers have used mathematical models and data to make money since the 1970s. Portfolio management has certainly not lost interest in new sources of data as a way of generating alpha, as the growing use of AI to read financial and research reports, of social media, satellite and mobile telephone data, and of algorithmic trade execution tools attest. What is new is that data management and analytics are now spreading from the front office to the back and middle, and into sales and distribution as well. Sales and marketing teams are using data to segment distributors by client profile, location, purchasing channels, technological sophistication and profitability, and to identify cross-selling opportunities. Risk managers are using data to assess client concentration risk and predict redemptions by client, investment strategy, asset class, share class and fund, so portfolio managers can plan liquidity needs more accurately. Compliance officers are using data to prove to regulators that funds are delivering value-for-money, treating clients fairly and not being mis-sold, and to automate trade surveillance. Heads of operations are using data to ensure distributors are paid the right amounts and the firm is not over-charged. In fact, virtually every function within an asset management firm can lift its performance through cleaner, broader and properly analysed data. But what all these techniques depend upon is the ability of an asset management firm to access data from multiple internal and external sources, normalise, standardise, store and analyse it, and then make it available to the users in a convenient format. In developing these capabilities, no asset manager can yet claim complete success. But some have certainly progressed further and faster than others. This Future of Finance webinar will bring together data scientists, technologists, consultants and asset managers working in the field of data management in the asset management industry to explore how current progress can be accelerated.

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1. Is a CBDC issued directly to retail consumers, and not via the banking system, a serious near-term or long-term possibility?

2. Which entity (or type of entity) is best placed to resolve how CBDCs will interact with private sector crypto-currencies?

3. Which entity (or type of entity) is best placed to develop the technical standards necessary to enable domestic CBDC systems to inter-operate across national borders?

4. What are the drivers of and obstacles to multi-currency CBDCs?

5. What product and service innovations are CBDCs likely to encourage?

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Hosted on Acast. See acast.com/privacy for more information.