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The birth and rise of Bitcoin cryptocurrency paved the way for several waves of innovation, which are gradually changing the paradigm of cryptocurrency. Financial ecosystem. this Digital assets Powered by Tokenization And support Blockchain Technology is undeniable now.
Among the recent milestones that have made headlines; the increasing value of Bitcoin, the incredible story of being hacked and returning tokens in the Poly network, and the story of star footballer Leo Messi to Paris Saint-Germain The transfer package contains so-called “fan tokens”.
It may be less intermediary but it is still worth noting that Continue to grow According to Defipulse, the value of the decentralized finance (DeFi) ecosystem-currently close to the “lock-in value” of $100 billion.
Early overhyped initial coin offering (ICO) Smart contract-Based on innovation and speculation around cryptocurrencies – such as the notorious spelling mistakes made by crypto investors HODL, Refers to buying and hoping to see the asset value multiplied by 100 times-just the tip of the iceberg. The innovative technologies driving the rise of cryptocurrency are expected to change the financial industry in profound ways.
Understand how digital assets can improve security and scalability to speed up settlement
Beneath the surface, advanced financial tools for digital assets are emerging. These tools are driven by the programmability of smart contracts, allowing them to mimic what happens in the regulated world of cash and securities: financing, lending, lending, trading, derivatives, and even automated liquidity market makers.
These initiatives are not yet mainstream-my own view of the mainstream is when my digitally savvy friends and family adopt a trend. However, some of these trends introduce disruptive business models and new governance solutions that may trigger major changes in regulated financial institutions. ecosystem.
Transformation of the regulated financial ecosystem
Several commercial and so-called custodian The banks did not hide their interest in supplementing their core securities services with new products that focus on digital assets (from issuance to depository and services).
In addition, experiments in the field of central banking are ongoing, showing that people are increasingly interested in central bank digital currency (CBDC).Newest Market signal From the European Central Bank (ECB), a 24-month investigation phase was launched around the digital euro, focusing on the retail sector.
Prior to this, the Banque de France (Banque de France) launched an ambitious CBDC experiment in March 2020, triggering eight different workflows focusing on the wholesale money market-limited to corporate and financial Institutional large transactions.
Many areas of digital assets are deeply intertwined: securities settlement and payment in the real world may represent the two legs of the same operating life cycle. For this reason, it is expected that innovation in one dimension (such as cash) may eventually trigger further adjustments in continuous space (such as securities).
This is demonstrated in the Euroclear program in the context of the Bank of France CBDC program. IBM is a technology partner and has an entire ecosystem involving post-transaction operations of French government bonds, including:
- French Trésor Agency As an issuer, report to the French Ministry of Economy, Finance and Recovery
- Bank of France, as a CBDC issuer and AFT Bank
- Euroclear, as the central securities depository
- BNP Paribas, Societe Generale, Credit Agricole, HSBC as primary dealers
Check Full report, Attempt to use blockchain technology to settle French government bonds with the central bank’s digital currencyAnd watch the short video below to learn more.
The boundaries between the previous world and a more decentralized world are getting blurred, if you consider the recently launched “market infrastructure pilot system based on distributed ledger technology” European Commission In March 2021, “small” issuers (less than 200 million euros) and bond issuances (less than 500 million euros) will be exempted from certain central securities depository (CSD) requirements to maintain Blockchain technology.
From Bitcoin to DeFi
The rise of cryptocurrency has always been and is still a topic for a group of passionate “geeks” (such as me), but the traction I see from the regulated financial world through the exposure of our industry and technical consulting activities shows The potential of digital assets is reaching another dimension.
The current experimental stage may give people the impression that the vision of change is still far away, but the change has already begun, and the financial ecosystem is already working under the premise of major changes. The question is no longer “if” but “when”.
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Translate strategy into business resultsIBM Blockchain Services can help you turn your ideas into reality. Explore the use of blockchain and digital assets in your business.
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