News - 18.10.2023

Replay - Focus on Crypto & Tokenisation

  • FinTech

The world of crypto & tokenisation is fast moving, and the events of the last year demonstrate this aptly. From FTX’s collapse and the subsequent turmoil in the markets to the EU’s Markets in Crypto Assets Regulation’s (MiCA) entry into force in June 2023, major developments are propelling this area of finance forward rapidly. At the same time, the underlying technology, DLT, is becoming increasingly used in finance and its benefits are more evident. Our Focus On Crypto & Tokenisation brought together a number of leading experts to discuss a wide range of topics relating to this area of financial services.

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Jack Ehlers, COO of Bitstamp, opened our Focus On discussing the current state of the crypto landscape post FTX. “Institutional trading definitely isn’t dead, but it is probably on life support coming out of FTX” he noted, highlighting the difficulty of the situation and how it has forced institutional actors to examine their risk appetite for the industry when comparing it to the traditional finance industry. Nonetheless, he emphasised that the sector still holds a lot of promise for investors and financial firms alike. Steve Jacoby, Regional Managing Partner for Continental Europe of Clifford Chance, followed detailing the importance of the EU’s DLT Pilot Regime. He highlighted some of the key intentions behind the regime, notably providing the possibility to create market infrastructure relating to the trading and settlement of DLT financial instruments and helping players overcome challenges in existing legislation that could hamper this.

Our first panel, comprising of experts from Homsy Legal and HSBC Continental Europe, delved into the topic of digital assets for issuers. Panellists explored a number of factors in this area, including certain legal constraints and concerns of which issuers should be aware, the advantages DLT platforms bring for issuers, and the possible conflicts and areas of complementarity between both the traditional and DLT-based securities frameworks for issuance. Scott Lucas, Head of Markets DLT at J.P. Morgan, looked at the wider use cases for DLT beyond securities issuance. Scott highlighted a number of areas where DLT is increasingly being used in the broader lifecycle; from post-trade and settlement where it is creating increased precision and certainty removing risk in the market, to servicing where it has a number of benefits, including, for example, increasing transparency and lowering cost base by requiring less overhead.

Our final panel explored Real World Asset Tokenisation. Experts from Tokeny and Fortunafi discussed potential use-cases in this area, from T-bills and money-market funds to real estate. Additionally, they delved into advancements in the regulatory space to create scalable forms of tokenised securities, as well as some of the technological advancements that still need to occur to make adoption in this space more rapid.

Access the full replay here.