The Depository Trust & Clearing Corporation (DTCC) announced the DTCC Digital Launchpad, an industry sandbox intended to bring together financial market participants and clear the path to scalable adoption of digital assets. As an open ecosystem, DTCC Digital Launchpad will feature market participants, technology providers, and others working together to identify and collaborate on meaningful pilots that have a clear path to production.
“DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology,” said Frank La Salla, DTCC President, CEO and Director, in a statement. “As an industry-owned and governed infrastructure for the world’s largest capital markets, DTCC is uniquely suited to drive industry collaboration under the banner of a larger goal: building a digital asset ecosystem that’s as safe and sound as the one we have for traditional securities today.”
Current estimates suggest tokenization presents a monumental business opportunity, with projections stating $16 trillion dollars in tokenized securities could be on digital rails by 2030. However, adoption of this technology has stalled as the industry continues working in silos. Most digital asset initiatives today have differing and conflicting standards, controls, and operational processes, leading to a fragmented digital landscape.
“We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach,” said Nadine Chakar, global head of DTCC Digital Assets. “The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”
Launchpad PoC results
DTCC today also announced the results of a recent proof-of-concept on DTCC Digital Launchpad. Led by Japan Securities Clearing Corporation (JSCC), clearinghouse of Japan Exchange Group, the proof-of-concept explored how central counterparties (CCPs) could use tokenization to optimize the collateral management process for clearing members and their buy-side firms.
In particular, it examined how margin calls and their associated processes could be automated, made more efficient and transparent for all participants using digital assets and smart contracts – or rules that automatically execute on a distributed ledger when certain conditions are met.
“JSCC is excited to share the results of our successful proof-of-concept, which demonstrated that digital assets and smart contracts technology could be leveraged to introduce operational and capital efficiencies for market participants in the collateral management process,” said JSCC President & CEO, Konuma Yasuyuki, in a statement. “By leveraging DTCC’s reusable blockchain-based infrastructure, we were able to jump-start our proof-of-concept, easily issuing digital assets such as cash, stocks, and bonds without needing to develop our own infrastructure. This allowed us to shift our focus to the initiative’s impact on our own business processes.”