What are the Risks and Benefits for DLT in Capital Markets?
(23 May 2023 – United States) The Global Financial Markets Association (GFMA) has presented new insights into the potential benefits and risks of distributed ledger technology (DLT) in capital markets.
‘The Impact of Distributed Ledger Technology in Global Capital Markets’ report considers collateral management, the tokenisation of assets and sovereign and quasi-sovereign bonds as emerging use cases where the technology could be beneficial.
“DLT holds promise for driving growth and innovation. This potential should not be ignored or prohibited where regulatory oversight and resiliency measures already exist. Policymaking should focus on creating a regulatory framework that supports financial stability and responsible innovation in digital asset markets, while also setting out a level playing field for both new entrants and regulated financial institutions” commented GFMA CEO Adam Farkas.
“A technology-neutral and outcomes-based approach to regulation is crucial. The goal of our latest report is to help policy makers and financial market participants to find a way forward that ensures appropriate stability and protections, while also allowing the industry and economy to harness the benefits of this new technology.”