Hello Community!
Sharing the whitepaper, which is a joint effort by JD Risk and UBS on utilising new technology such as DLT and AI to improve capital market efficiency.
"Towards Digital Capital Markets" explores the integration of emerging technologies, such as Distributed Ledger Technology (DLT) and Artificial Intelligence (AI), with traditional finance to enhance efficiency and reduce costs in capital markets. It proposes a hybrid model that combines elements of Decentralized Finance (DeFi) with Traditional Finance (TradFi), aiming to standardize and streamline transaction processes, minimize intermediaries, and expedite settlement times. Key components of this model include the tokenization of financial instruments, automation of settlements through smart contracts, and, where appropriate, the implementation of near-instantaneous 'atomic' settlements.
The whitepaper also emphasizes the potential of DLT to significantly reduce intraday liquidity costs for banks by enabling true Payment versus Payment (PvP) solutions and atomic settlement, thereby decreasing the need for intraday liquidity buffers.
Additionally, the document highlights the urgency for the UK to advance the digital transformation of its financial services industry, particularly its capital markets, to maintain its status as a leading international financial center. It outlines concrete actions for the government, regulators, and industry to facilitate this transformation, including the adoption of industry-wide standards for DLT and digital assets, leveraging regulatory sandboxes for testing new models, and providing regulatory clarity on digital assets.
What is your experience in this and what insights can you share?
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Aya Pariy
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