As blockchain technology gains traction among traditional financial institutions, the journey to integrate it with existing systems presents both opportunities and challenges.
Sandra Ro, CEO of the Global Blockchain Business Council (GBBC), recently addressed these complexities. She emphasized the foundational steps crucial for blockchain’s evolution within the financial sector. Ro will share more insights at the forthcoming Benzinga Future of Digital Assets event.
Bridging Blockchain and Traditional Finance
During her talk, Ro observed that many financial firms are now creating tokenized products, such as money market funds and bonds, in an effort to connect blockchain technology with traditional financial frameworks.
“Institutions are leaning into developing tokenized products like money market funds, bonds, and repo,” she explained. Ro believes these initiatives aim to ensure compatibility between blockchain technologies and conventional infrastructures, fostering a system where diverse financial platforms can work together seamlessly.
Establishing Industry Standards
At the recent SIBOS conference, Ro noted that a significant focus was on the necessity for standardized practices. Organizations such as Swift, Depository Trust & Clearing Corporation (DTCC), Deutsche Börse, and Euroclear are collaborating to create comprehensive frameworks that support blockchain advancements.
According to Ro, resolving what she termed “the digital cash leg” of tokenized transactions is pivotal for realizing the full potential of these systems. Addressing this component is crucial for ensuring that the technology meets its promise within the financial landscape.
Regulatory ambiguity is another hurdle Ro identified in propelling blockchain technology forward in finance. She pointed out, “Much work is in progress by industry to scale, but regulatory uncertainty hinders scaling and innovation.”
To tackle these challenges, Ro emphasized the efforts of the Digital Asset Market Subcommittee (DAMS) under GMAC, which seeks to establish consistent definitions for digital assets. This initiative could help alleviate regulatory confusion and pave a clearer path for future developments in the sector.
As blockchain technology continues to permeate the financial world, Ro’s insights underline the need for both technical interoperability and regulatory clarity to shape the industry’s future. The upcoming Benzinga Future of Digital Assets event will gather experts to further discuss these critical issues.
The digital asset market is evolving, and the interplay of regulatory changes, mergers and acquisitions, and adoption trends will shape this vibrant sector. Benzinga’s Future of Digital Assets event in New York City this November aims to provide industry leaders and investors with an opportunity to delve into these developments, offering valuable perspectives on the changing regulatory landscape and current market trends.
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