数字资产、分布式账本技术和资本市场的未来报告（英）-世界经济论坛-2021.5-100正式版

DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarketsINSIGHTREPORTMAY2021Contents34ForewordContext5IntroductionKeyinsights1.Background714151724BusinessandtechnologydevelopmentsincapitalmarketsOverviewofDLTinthecapitalmarketscontextTimelineofmajortechnical,regulatoryandbusinessdevelopments262.DLTanddigitalassetsincapitalmarkets272829SpectrumoffuturescenariosDLT-relatedconsiderationsfordifferentcapitalmarketsactorsFrameworkfordifferentapproachestoDLTsolutions323.Usecaseanalysisbyassetclass/productline35465664727984EquitymarketsDebtmarketsSecuritizedproductsDerivativesSecuritiesfinancingAssetmanagement/fundadministrationEnablementusecasesCover:GETTY/PirankaInside:allGETTY/Poganka06,MicroStockHub,DKosig,TetianaLazunova,MicrovOne,Maxger,Enjoynz,Filo,Maxger,AF-studio,Filo,KotoFeja87919496ConclusionContributorsAcknowledgementsEndnotes©2021WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets2ForewordRoyChoudhuryManagingDirectorandPartnerBenWeismanInitiativeLead,FinancialInnovationWorldEconomicForumBostonConsultingGroupInrecentyears,thefinancialinstitutionscomprisingthecapitalmarketshavebeguntoapproachdigitaltransformationwithalevelofurgencypreviouslyseenonlyinconsumer-facingfinancialservices.Theneedtoimproveclientservicedelivery,achievegreaterefficiencyandenablenewservices(e.g.throughmonetizationofdata)haveconvergedonimperativesforallcapitalmarketsexecutivestoexplorehowtechnologyshouldbeusedtoredesignproductofferingsandoperations.SincetheWorldEconomicForumpublishedTheFutureofFinancialInfrastructurein2016,wehaveseenrelativelylittleoftheblockchain-enabledtransformationexploredinthereport.Yetwearepotentiallyapproachinganinflectionpoint,withmeaningfulDLTusecasesgoingliveandmanyinstitutionsacknowledgingthatthistechnologywilllikelyplaysomeroleinthefutureofcapitalmarkets.Thisreportexploresthevariouswaysinwhichthistechnologyisstartingtobeused,aswellasthechallengesinvolvedinattemptingindustry-widetransformation.Atthesametime,distributedledgertechnology(DLT),ofwhichblockchainisthemostwidelyknownexample,hasgonethroughseveralpendulumswingsintermsofindustryandpublicinterest.Dependingonone’sperspective,thistechnologycoulddisintermediatethecapitalmarketsasweknowthem,radicallysimplifyoperationsforleadingcapitalmarketsplayers,helpexpandaccesstomarketsforsmallbusinessesandretailinvestorsorfadeintoirrelevance.ConsistentwiththeWorldEconomicForum’smultistakeholderapproach,theinsightspresentedherearebasedondialoguesandinterviewswithexpertpractitionersfromacrossthecapitalmarketsecosystem.Wethankallwhoparticipatedinthisinitiativeandshapedourunderstandingofthisspace.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets3ContextDistributedledgertechnology(DLT)*hasexistedformorethanadecade.Fornearlyaslong,advocateshavearguedeitherthatthistechnologycouldbeusedbyfinancialinstitutionstoradicallysimplifyoperationsorthatitsdecentralizedcapabilitieswouldenableanentirelynewfinancialsystem,whereincapitalcouldflowwithouttraditionalintermediaries.DLT’sdetractors–perhapsjustasnumerous–havepointedoutchallengesinbothofthesevisions,stemmingfromthepotentialcostsoftransformation,thecapitalmarkets’relianceonrelationshipsoftrustandtheexistenceofothertechnologiesthatmightbebettersuitedforcertainuses.Inthiscontext,firmshaveinvestedheavilyinDLTefforts,withawiderangeofstrategicmotivations.Whatusecaseshavebeendevelopedacrossassetclasses,andhowaretheybeingadopted?WhichDLTusecasesaregainingtraction,inwhichjurisdictionsandwhy?Overthepasttwotothreeyears,severalregulatorshaveexpressedgreatercomfortwiththistechnology,andsomeDLT-enabledproductsandserviceshavemovedfromexplorationandexperimentationtocommercialization.Ithasbecomeclearthat,atamarket-widelevel,DLToffersthepotentialforsignificanttransformation.Thisreportexploreswhathasbeenlearnedfromtheseefforts.Whileultimatelyneutralastowhatthecapitalmarketsofthefuturewilllooklike–andwhatroleorroleswillbeplayedbyDLT–itaimstoprovidecapitalmarketsexecutivesandregulatorswiththestrategicinsightsneededtounderstandthecurrentstateofuse-casedevelopmentsandpotentialfuturescenarios.WhataretheHowareindustrydynamics–collaborationandcompetition–shapingadoptionanddemand?impedimentstoadoption,andwhathasbeenlearnedasaresult?*Thispaperusestheterm“DLT“torefertodistributedledgertechnologyandblockchain.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets4IntroductionOverthepastyear,financialservicesandtechnologyexpertswereengagedinaseriesofglobalworkshopsandexpertinterviewsGlobalworkshops*Eightworkshopswereconductedoverthecourseof2020–allvirtually.Thesebroughttogetherexecutivesfrombanks,assetmanagers,exchangesandinfrastructureproviders,financialtechnologycompaniesandregulatorsforaseriesofinteractivediscussions.Threeworkshopswerefocusedondevelopmentsfromaregionalperspective(NorthAmerica,EuropeandAsia-Pacific),whilefivewerefocusedonemergingusesofDLTwithinspecificassetclassesorproductlines(equities,debt,securitizedproducts,derivativesandsecuritiesfinancing,andassetmanagement).BISExpertinterviews*In-depthinterviewswereconductedwithalmost200executivesfromleadingfinancialservicesandfinancialtechnologyfirms,aswellaswithexpertsfromoutsidetheindustry.LiquidMortgageSurvey*Morethan60firmsparticipatedinananonymizedsurveyfocusedondetailsofDLTusecasesthattheirfirmsaredeveloping.Whilenotascientificsampling,thissurveyenabledtheteamtoeffectivelymapoutwhereDLTexperimentsarebeingconductedwithinthecapitalmarkets.TheinclusionofcompanycasestudieswithinthisreportdoesnotreflectanendorsementofthecompanyoritsproductsandservicesbytheWorldEconomicForum.*PleaseseeAcknowledgementsforalistofindividualswhoparticipatedinworkshopsandinterviews.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets5INTRODUCTIONThisreportwillprovideexecutives,regulatorsandpolicy-makerswithinsightsontheemergingusesofDLTincapitalmarketsThisreportwill…Thisreportwillnot…–Exploremanyofthewaysinwhichcapitalmarketsinstitutionsandtechnologyfirmsareexperimentingwithorbuildingproductsenabledbydistributedledgertechnology–FocusonDLT-relatedusecasesoutsidethecapitalmarkets,includingpayments,digitalcurrencies,lending,workingcapitalsolutionsandtradefinance(exceptastheyrelatetospecificcapitalmarketsusecases)–––IllustratehowindividualDLTusecasesmayaddresschallengesorinefficienciesinspecificmarkets–––Explorecryptocurrencies,non-fungibletokens(NFTs)ordecentralizedfinance(DeFi)applicationsShareinsightsfromrelevantexpertsonpotentialpathsforward,challengesorenablersfortheseusecasesProvidedetailedtechnicalexplanationsoffinancial,operationalortechnologicaldimensionsofusecasesHighlightexamplesoffirmsbringingspecificusecasestomarket,withsummarydetailsoneachEvaluateusecasesormakerecommendationsonstrategiesthatindividualinstitutionsshouldpursueThisreportseekstohelp…–Strategicdecision-makersatfinancialinstitutionstounderstandthepotentialrolesDLTisbeginningtoplayinthecapitalmarkets,criticallyassessdifferentusecasesandexplorehowtheirinstitutionmightoperatewithindifferentfuturestatevisions–Regulatorsandpolicy-makerstounderstandhowfinancialinstitutionsindifferentjurisdictionsareadoptingDLT-enabledsolutionssothattheymaycraftresponsesthatappropriatelybalanceinnovationandmarketsafeguardsDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets6KeyinsightsDLTisbeginningtoreshapecapitalmarkets,butthefutureisuncertain12345Marketforces,supportedbyregulatoryandtechnicaldevelopments,arepushingparticipantsincapitalmarketstodigitizeandconsidertheuseofdistributedledgertechnology(DLT).Keytrendsincludegrowinginstitutionalandregulatorycomfortwithblockchaintechnology,thepotentialforcentralbankdigitalcurrencies(CBDCs)inseveraljurisdictions,andcommercialdynamics,suchascostpressuresandclientserviceexpectations.TheunderlyingchallengesthatDLTistryingtosolveincapitalmarketsarerealandsubstantial.Inefficienciesvarybyassetclassandjurisdiction,butlegacyprocessesandtechnologysystemshavecreatedcomplexity,opacityandfragmentationacrossmarkets,whichlikelyhasameaningfulimpactoncosts,marketliquidityandfirms’balancesheetcapacity.AfteryearsofWhilemostemergingWhilegreaterdigitizationisinevitable,substantialheadwindsmaycontinuetolimitadoptionofDLTsolutions,includinglimitedleadershipbuy-inanduncertainbusinesscases,theneedforsignificantrestructuringofbusinessoperations,challengesrelatingtobridginglegacysystemswithnewsolutions,andperceptionsaboutregulatoryuncertainty.experimentation,manyDLTandsmartcontractusecasesincapitalmarketsareliveacrossjurisdictions.Marketparticipantsarelaunchingsolutionsdesignedtoimproveexistingprocessesfordefinedecosystemsinnumerousassetclassesandinsomecasesarereimaginingvaluechainsasweknowthemtoday.However,grandvisionsofdisintermediationortotaldigitaltransformationatscalearestillfarfromDLTusecasesarebeingdevelopedcollaboratively,thereisnoindustry-widevisionofthefutureinmostjurisdictions–dueinparttosubstantialcompetingincentivesandtheriskofvaluemigrationacrossmarketparticipants–potentiallylimitingtheabilitytoscaleupmanysolutions.WhileDLTisnotnecessarilytheoptimaltechnologyoptionforeveryproposedusecase,experimentsbeingrealized.areprovingitsviabilityinaddressingsignificantoperationalinefficienciesandincreasinglyimprovingbalancesheetmanagement.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets7KEYINSIGHTS1.SignificanttailwindsmaysupportadoptionofDLTsolutionsincapitalmarketsMutuallyreinforcingdevelopmentssupportingfinancialinstitutions’explorationofDLT……areintersectingwithbroadcapitalmarkettrendsMarketdevelopmentsPolicydevelopmentsTechnicaldevelopmentsIncreasedcompetition,includingtheriseofdigitaldisrupterschallengingtherolesoftraditionalintermediariesandserviceprovidersGrowingretailandinstitutionalinvestorinterestindigitalassets,mostnotablycryptocurrenciesGrowingregulatorycomfortwithDLTacrossseveraljurisdictionsTechnicalEmergenceofabifurcatedclientservicemodel,withafocusondigitizationandsimplificationforallclienttypesadvancementsinDLT/blockchain:growingmaturity,platformconsolidationandimprovementsininteroperabilityBalancesheetcapacitycontinuingtobeamajorconstraintAccelerationofdigitaladoptionduetoCOVID-19pandemicSustainedcostpressuresacrossthevaluechainDevelopmentsinadjacentmarkets,includingstablecoinsandDLT-basedSeriousexplorationofCBDCsinnumerousjurisdictions,includingsomebasedonDLTInstitutional-gradeinfrastructureindigitalassetmarketstradefinanceandpaymentsolutionsAcrossthecapitalmarketsecosystem,broadtrendsareacceleratingthedigitalpushDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets8KEYINSIGHTS2.DLTmaybeabletoaddresssignificantchallengesacrossthecapitalmarketsThescaleandnatureofinefficienciesvariesacrossmarkets,butlegacystructurestendto:DLTisprovingwell-suitedforaddressingoperationalinefficiencies,andisincreasinglydemonstratingthepossibilityofbetterresourcemanagementacrossfirmsandmarkets:–Requirefirmstoindependentlymaintainsiloedrecordsoftransactions,securitiesandotherdata,witheachinstitutionindependentlyprocessingeventsandsubsequentlyreconcilingrecords.Thisaddscomplexitytooperations,increasestheriskoferror,limitstheabilitytoautomateprocessesandlikelyaddscostsacrossthecapitalmarketsecosystemDLTCreatetrustinareal-time,sharedsourceoftruthacrossmultiplepartiesinamarketortransactionAutomateandEnableassetstobemoreefficientlyandflexiblytransferredacrossentitiescapabilitysynchronizebusinessprocessesacrossentitiesusing–Limittheflexibilityoftransactionwindowsandtimeframesinordertoaccommodatetheneedforsequentialprocessingandverification.Whilemanyhighlightthecostsofliquidityneededtofundmulti-daytradesettlementcycles,thisdynamicalsolimitstheabilitytooptimizebalancesheets,asfirmsareunabletorapidlymovesecuritiesandcashtoaddressfundingandliquidityneedsandavailabilitysmartcontractsBusinessbenefitMinimizetheneedforreconciliationsandmanualdataverificationsReducemanualinterventions,riskandcostacrossprocessesUnlockliquidityandenablebetterbalancesheetmanagementacrossandbetweenfirmsDLTusecaseexampleMortgage-backedsecuritieswithunderlyingloandatarecordedonDLTDerivativespost-tradelife-cyclemanagementplatformsIntradayrepousingtokenizedcollateralanddigitalcashDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets9KEYINSIGHTS3.DLTapplicationsaregoingliveacrossthecapitalmarketsAfteryearsofexperimentation,financialinstitutionsandtechnologyprovidershavebeguntolaunchDLT-basedproductsandprojects.Whilecapitalmarketsarenotnecessarilymovinginexorablytowardsaglobal,fullydigitized,DLT-basedutopiaasmanypredicted,DLT-enabledusecasesarebecomingarealityacrossarangeofassetclasses,businesscasesandecosystems.Examplesofusecasesgainingtraction(asofApril2021)ProofofconceptLaunchscheduledLiveinproductionSoonSoonLiveMajormarketinfrastructurereplatformingusingDLTLiveBilateral/intracompanyrepoSecuritizationofblockchain-originatedloansCorporatebondissuancesLiveIntradayrepoLiveSoonCorporatebondoriginationworkflowPrivateequitytokensissuedonblockchainEnd-to-enddigitalmarketinfrastructurefrommajorinfrastructureproviderPublicfunddistributionPublicfundadministrationSoonSoonLiveCross-borderEquity/creditderivativeslife-cyclemanagementcollateralmobilityPrivatefundadministrationanddistributionDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets10KEYINSIGHTS4.StrategicconsiderationsaredrivingdivergentvisionsofthefutureInstitutionsaredecidingwheretoinvestacrossarangeofstrategicchoices,including:Butasdifferentplayersembarkonvaryingstrategies,thesechoicesarecreatingtensions:DigitalproductstrategyRedistributionofvaluepoolsandthe“collaborationparadox”1.Marketselection:focusondevelopingsolutionsforindividualassetclassesorDLT-enabledtransformationcouldmaketheindustrymoreefficient,butitwouldlikelyshiftvaluepoolsamongbothincumbentfirmsandnewentrants.Giventhepotentialfornewbusinessopportunitiesandthepossibledisintermediationofsomeexistingroles–aconceivablerealityasregulationsadapttoDLT–firmsmaybeincreasinglyreluctanttoparticipateincollaborativeinitiatives.Withoutcollaboration,however,ecosystem-widevaluewillbedifficulttoachieve.developanasset-classagnosticinfrastructuresolution2.Valuechainbreadth:focusonaddressingchallengesinonesliceofthevaluechainorbuildanend-to-endsolution3.Degreeofchange:attempttoimproveexistingprocessesorfundamentallydisruptthemarketasitexiststoday4.Technologyfit:identifywhetherDLTisthemostappropriatetechnologyforaAcomplexpatchworkofinitiatives,spanningdifferentinstitutions,businesslinesandgeographies,limitingtheabilitytoreachscalespecificsetofchallengesandhowitwillbeusedSincemanyDLT-basedinitiativeswouldindependentlyrequireasubstantialleveloftransformation,institutions’focusonalimitedsetofinitiativesorconsortia–whichmakessensefromtheperspectiveofanyindividualfirm–canpreventthecross-institutionalignmentneededformanyusecases.Similarly,whileregulationscanhelpdefinetheguardrailsforinnovation,insomecases,vastlydifferentregulatoryframeworkshaveledtoverydifferenttechnologyneedsindifferentmarkets.Go-to-marketstrategy1.Commercialandtechnicalapproach:attempttobuildanewecosystem,workwithanexistingsetofpartnersoranotherapproach2.Transformationmanagement:determinewhethertobuildanewsystemandmigrateallparticipantsorbuildandoperateinparallel3.Interoperability:determinewhetherandhowsolutionswillintegratewithotherplatformsandsystems,technicallyandcommerciallyShort-termvs.long-termstrategiesWhileachievingshort-termobjectiveswillbuildcomfortwiththetechnology,itmay,counter-intuitively,inhibittheappetiteforlarge-scaletransformation.Giventhelongpathwaytotransformingentiremarkets,lackofbuy-inforlong-termsolutionsmaylimittheupfrontinvestmentneeded.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets11KEYINSIGHTS5.ChallengestoDLTadoptionremainsubstantialBusinesscaseandleadershipbuy-inBridgingtheoldwiththenew“Chickenandegg”dilemmasCoordinationchallengescombinedwithlimitedriskappetitesRegulatoryandlegaluncertaintyManyDLTprojectsarefocusedonachievingalong-term(i.e.five-plusMaintaininglegacysystemswhilebuildingandscalingnewsolutionsislikelytobecostlyandcomplex.WhilecommontechnicalandfinancialstandardsareessentialformanyDLTusecases,theymayalsoproveessentialforenablinginteroperabilitybetweenlegacysystemsandDLT-basedsolutions.Nevertheless,institutionsandmarketsattemptingparallel(DLTandlegacy)infrastructureswillhavetoeffectivelymanagecostsandrisks.Formostusecases,achievingscalemaybemorechallengingthanreachingproduction.Exceptforcompletelyinternalsystems,allusecaseswillrequirea“minimum-viableecosystem”ofparticipants(e.g.atleastoneofeachoftherelevantpartiesforacertaintypeoftransaction).However,someDLTsolutionswillcreatenewmarketsthatwillexistinparalleltotraditionalmarkets.Withneitheranactiveinvestorbasenoranactiveissuerbase,theseparallelmarketsmaynothaveaclearpathtoWithoutaclearplaybookforregulatorycomplianceandgenerallyagreed-uponprinciplesforthelegalstandingofDLT-enabledtransactionsandsecurities,marketparticipantsareunlikelytomakethesubstantialyears)valuepropositionbutrequiresubstantialupfrontinvestmentandindustry-widetransformationintheshortterm.Wherethebusinesscaseislong-term,projectsmustbechampionedbyleaderswiththeauthoritytoinfluenceindustry-widealignmentinordertomoveforward.Wherethebusinesscaseisunclearorthetechnologyisnotnecessarilyfit-for-purpose,leadersshouldconsiderwhethertheseprojectsaredivertingenergyfromotherworthwhiledigitizationefforts.Inmanycases,realizingtheanticipatedbenefitsofDLTwillrequiresignificantrestructuringofroles,processesandoperations,potentiallyintroducingnewrisksasmarketsadjust.Whileindustryconsortiahavetackledlarge-scalechallengesandtransformationsbefore,theappetiteforsystem-widechangeremainslimitedwithouta“burningplatform”forchange.investmentsrequiredtofundamentallychangeprocesses.Further,regulationvariesacrossjurisdictions,complicatingglobalsolutions.WhilemanyregulatorshaveexpressedopennesstoDLT-basedinnovation,aperceptionremainsthatthefuturepathisunclear,particularlyasmostnewentrantshavenotyetfacedprudentialregulation.liquidity,therebylimitingthewillingnessofinvestorstoparticipateorissuerstoissueinthesemarkets.DigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets12KEYINSIGHTSSummarySecuritizedproducts–End-to-endorigination,securitizationandservicingplatform––TokenizingloansforservicinganddatamanagementFacilitatingsecurityservicingonDLTDebtmarketsDerivatives–––––Platformfordigitalbondissuance––––PlatformforOTCderivativespost-tradelifecycleDistributedorderbookforbondtradingPlatformcoveringfullcorporatebondlifecycleRetailbondissuanceanddistributionStand-aloneblockchainbondissuanceReplatformingexistinginfrastructureonDLTPlatformmanagingcollateralforclearedderivativesPlatformforexchange-tradedderivativestradelifecycleThisreportexploresemergingDLTusecasesacrossthecapitalmarketsEquitymarketsSecuritiesfinancing––––Replatformingexistingpost-tradeinfrastructureSupplementingpost-tradeinfrastructureDigitalplatformcoveringfullsecuritieslifecycleEquitytokensissuedonblockchain–––DLTplatformforrepurchaseagreementsSecuritiesswapsacrosscollateralpoolsReplatformingsecuritieslendinginfrastructureAssetmanagementEnablementusecases––DLT-basedfunddistributionandregisterplatform––WholesalepaymentsInvestor-facingend-to-endplatformfortokenizedfundsFacilitatingcapitalmarketsdigitization–End-to-endfunddistribution,administrationandservicingnetwork––CustodyservicesfordigitalassetsDigitalassetissuanceplatformsDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets13Background1–Businessandtechnologydevelopmentsincapitalmarkets–OverviewofDLTinthecapitalmarketscontext–Timelineofmajortechnical,regulatoryandbusinessdevelopmentsDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets14BUSINESSANDTECHNOLOGYDEVELOPMENTSINCAPITALMARKETSAcrossthecapitalmarketsecosystem,institutionsarefacingacombinationofnewmarketdynamicsandtechnologyadvancements,presentingopportunitiesandchallenges…KeybusinessdevelopmentsBroadtechnologyimplicationsDLTimplicationsLikelyimpactonDLTinterestImmaterialSignificant1Accelerationofdigitaltransformation,especiallyfollowingCOVID-19:once-emergingtechnologiescontinuetogainscale,andclientdemandfordigitalassetsgrowsIncreasingexperiencewithartificialintelligence,machinelearning,cloudandDLTsolutionsIncreasingcomfortwithDLT;potentialforincreasedinterestinsolutionsthatbenefitfrommultiplicativeeffectofDLTwithothertechnologies23Bifurcatedclientservicemodel:transitiontoalow-touchdigitalservicemodelforcertainclientsandtransactionsIncreasingneedfordigitalself-serviceclientsolutions,aswellasdigitalenablementsolutionstosupportteamsservicinghigh-touchclientsDLTandsmartcontractscanfacilitatesolutionsofferinggreaterautomation,withpotentialforintegrationwithself-servicesolutionsSustainablefinanceasasourceofgrowth:demandforproductsthatmeetclients’sustainabilityobjectivesIncreasingneedforsolutionsthatcapturesustainabilityimpactPotentialdemandforDLT-enabledsolutionsformeasuring,reportingandtransactingwithsustainability-relateddata,potentiallylinkedtofinancialinstruments45Consolidationoftradingvenues:emergenceofasmallsetoftradingvenuesthatwillattractthebulkofliquidityincertainmarketsPotentialformoreelectronictradingandgreaterstandardizationinmoreconcentratedmarketsMoreconsistentandscalabledigitalprocessesandconvergenceofmarket-widestandardscouldbeatailwindforDLTimplementations,butDLTusecouldactuallystimulatemoretradingvenuesMonetizationofdata:insightsfromtrade,positionandclientdatatopowercustomizedofferingsIncreasingneedforeffectivedatacaptureandanalyticsolutions(e.g.machinelearning)DLTsolutionsmayofferbetterdataqualityanddataaccessibilitythanexistingsystemsDigitalAssets,DistributedLedgerTechnologyandtheFutureofCapitalMarkets15BUSINESSANDTECHNOLOGYDEVELOPMENTSINCAPITALMARKETS…whilemarginpressuresareforcingallplayerstoidentifymeaningfulcostsavingsandsustainablesourcesofrevenuegrowthKeybusinessdevelopmentsBroadtechnologyimplicationsDLTimplicationsLikelyimpactonDLTinterestImmaterialSignificant6Sustainedcostpressuresacrossthevaluechain:continuedneedtorealizemeaningfulefficienciesviaoperatingmodeltransformationsandinfrastructureredesignsIncreasedinvestmentinmodernizingtechnologies,withgrowingdemandforsolutionsthatunlockstep-changecostreductionsDLT-enabledautomationandoperationaltransformationcouldunlocksignificantcostefficiencies,butthescaleofinvestmentmightbeprohibitiveforsome78Scalecontinuestobeakeycompetitiveadvantage:subscaleplayerswillexitortransitionto“white-labelled”productsConsolidationoftechsolutionsandproviderswherecriticalmasstakesholdIncreasingreturnsfortheDLTsolutionsthatgainscaleandmagnifycompetitiveadvantage(i.e.first-moveradvantagewithnetworkeffects)Balancesheetcapacitycontinuestobeaconstraint:financialresourcescontinuetobejudiciouslyallocatedtoclients,businesslinesandproductsIncreasedinterestintechsolutionsthatfacilitatebettercapital/liquiditymanagementIncreaseddemandforDLT-basedsolutionsthatoffermeaningfulimprovementstobalancesheetmanagement,withpotentialforinterestinnewmodelsforcustody9IncreasedfocusoncoreServiceprovidersbecometechleaders,offeringcostandqualityadvantagesviatheirsolutionsIncreasedcomfortwithDLTsolutionsthatpowernon-corefunctionality,withgrowingcompetitionamongserviceproviders