ISSA crytpoasset report highlights post-trade infrastructures

The International Securities Services Association released a review of cryptoasset infrastructures by infrastructure providers. Cryptoassets seem to be on a trajectory to establish themselves as a new asset class. Though they are the subject of a great deal of hype, speculation and price volatility, an interesting momentum is developing behind Initial Coin Offerings (ICOs) and utility, asset and asset-backed tokens, as a potential method of financing start-ups and small and medium-sized enterprises.

The challenge cryptoassets issue to established financial market infrastructures is this: How can we create a safe and efficient environment for investors in this emerging asset class? Since cryptoassets have a number of features in common with traditional financial assets – their novelty lies in the distributed nature of the blockchain-based networks they use rather than their investment characteristics – they are naturally of interest to central securities depositories (CSDs).

As a critical component of the networks of the financial market infrastructures that currently underpin the securities markets, CSDs have a clear responsibility to investigate the cryptoasset phenomenon and see where they might be able to help the market develop a safe and efficient environment for issuers and investors. The purpose of this paper is to contribute to the present debate and broaden the dialogue on cryptoassets to include post-trade interests.

The report contains a summary of what market infrastructures are doing with blockchain around the world. Working group members contributing to the report include representatives from Abu Dhabi Securities Exchanges, SIX, DTCC, Euroclear, and central securities depositories from Russia, Slovenia, south Africa and Chile, SWIFT, among others.

Read the full report

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