THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2022
Valérie Noël :
The adoption of DLT , blockchain and digital assets
Valérie Noël , head of trading at Syz Group , speaks to the TRADETech Daily about the evolving landscape surrounding DLT , blockchain and digital assets including institutional adoption and application on the trading desk .
What is driving institutional adoption of DLT , blockchain and digital assets and where do the final hurdles to institutional adoption lie ? A recent study published by Fidelity Digital Assets that surveyed institutional investors showed 52 % of respondents were currently invested in digital assets , with nine out of 10 indicating they were actively exploring opportunities . Themes driving institutional adoption include growing interest by clients , increased regulatory clarity , institutionalgrade infrastructure and a growing decentralised finance ( DeFi ) ecosystem .
In terms of final hurdles to institutional adoption , integrating traditional trading systems and operational processes with the crypto ecosystem is a major challenge . Traditional platforms using protocols such as Swift are not widely supported in the crypto space . Should digital assets providers integrate into Swift or should new platforms be built ?
Where do you see DLT and blockchain , and digital assets evolving to in the next few years ? We believe that institutional adoption will
“ A major opportunity for blockchain and digital assets is the tokenisation of assets with tremendous implications for trading revenues and opportunities .” continue to grow . There are obviously big challenges and major costs involved . The massive investment opportunities and trading revenues attached to this new ecosystem will incentivise major institutional players to offer a fully-fledged offering across cryptocurrencies , staking , non-fungible tokens ( NFTs ), DeFi products , and security token offering ( STOs ) etc . to their clients throughout the different level of services they provide .
Where are DLT and blockchain currently disrupting the traditional financial markets and how do you expect this to change ? Blockchain technology provides a way for untrusted parties to come to an agreement on the state of a database without using a middleman . By providing a ledger that nobody administers , a blockchain could provide specific financial services — like payments or securitisation — without the need for a bank .
Further , blockchain allows for the use of tools like smart contracts - self-executing contracts based on the blockchain - which could potentially automate manual processes from compliance and claims processing to distributing the contents of a will .
For use cases that don ’ t need a high degree of decentralisation but could benefit from better coordination , blockchain ’ s cousin distributed ledger technology ( DLT ) could help corporates establish better governance and standards around data sharing and collaboration .
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