The ISSA (International Securities Services Association) Working Group on distributed ledger technology (DLT) and cryptoassets has published a new paper that continues its research on institutional crypto, which adds the perspective of both custodian banks and fintechs.
The paper explores the issuance, settlement, safekeeping and asset servicing of cryptoassets from a practical point of view. It also highlights the legal and regulatory implications of developing services and platforms for issuance and trading. Finally, it reviews the current status of efforts to devise market standards and other tools that will enable cryptoasset service providers and platforms to interoperate with each other.
The paper draws on the experience of participating members of the Working Group involved in building products, devising strategies or supporting projects that make use of DLT in existing lines of business in the securities industry. It also takes fully into consideration the robust business and technical standards in place today that strengthen the securities services industry and protect the customers being served.
The current status of DLT implementations offers no firm guidance on optimal market structures or business models. These must vary by jurisdiction, especially as existing laws and regulations governing Crypto Assets continue to evolve. In addition, no full-scale DLT system is live as yet, so the wider implications of DLT in terms of technical performance, efficiency gains, business model impacts, new service potentialities and possible future evolutions are difficult to predict.