Dynamo Study
Dynamo Study
Dynamo Study
8 June 2023
FOREWORD
The global financial industry is experiencing a Cambrian explosion of digital money and payments-related innovation, led by both the public and private
sectors, taking the form of central bank digital currencies (“CBDCs”), deposit tokens (“DTs”), and stablecoins (“SCs”), amongst others.
Given the use of infrastructure in traditional finance that separates messaging and settlement, thereby resulting in delayed settlement and cost, it is no
surprise that experimenting with blockchain and distributed ledger technology (“DLT”) to achieve Payment versus Payment (“PvP”), Delivery versus Payment
(“DvP”), and programmability is a key driver of innovation in the global payments landscape, and precisely where this type of innovation shows the highest
promise.
Nevertheless, given the experiment in this space is still very new, benefits are being carefully weighed against key risks and challenges. Common challenges
include identifying unmet current and future commercial needs, the most suitable technology stacks, the optimal legal classification and terms and conditions,
the challenges in meeting regulatory compliance, and the challenges associated with building and governing new consortia and networks that don't
compromise the safety and efficiency of financial market infrastructures.
It goes without saying that these uncertainties need to be addressed for this innovation to take root in a more sustainable manner. Against this backdrop, and
in the context of project Dynamo which involves the use of digital trade tokens, the BIS Innovation Hub Hong Kong Centre partnered with Quinlan &
Associates to develop an in-depth landscape study of the current state of play of CBDCs, DTs, and SCs, underpinned by interviews with 29 leading global
market participants and stakeholders active in one or more of these explorations.
We hope that policy-makers and industry players can leverage the content of this study to foster closer cooperation among the public and private sector, while
also enabling the Cambrian explosion to reach a desired end destination – namely, well-rooted innovation that is spurred by unmet commercial needs and
characterised by robust regulatory compliance.
2
IMPORTANT NOTES
• The data set forth in this report is derived from the findings of both primary interviews and facts gathered via secondary research efforts.
• The views in this report are predominantly based on interviews conducted with high-profile market stakeholders and facilitators who are actively
involved in experimentation with CBDCs, DTs, and SCs.
• Certain statements made within this report reflect an aggregated view, based on our interview findings, and should not be interpreted as the
opinion or endorsement of the Bank for International Settlements (‘BIS”) or BIS Innovation Hub (‘BISIH”).
• As both the technology (i.e. blockchain / DLT) and the assets (i.e. CBDCs, DTs, and SCs) are currently in their early stages of development, the
report's objective is to provide context for various market adoption exploration efforts across the wider industry. The report does not assume
there will or shall be widespread adoption of either the technology or the assets across financial markets.
• This report only showcases the adoption of both the technology and the assets within the context of wholesale financial market operations. As
such, applications of the technology and the assets for retail use cases (e.g. peer-to-peer transfers, for the purposes of / access to investment in
the digital assets market by retail investors) is not within the scope of this report.
• This study is explicitly focused on the adoption exploration of "blockchain representations of sovereign currency" that are either fully or partially
collateralised / backed by sovereign currency or its equivalent. Alternative forms of 'blockchain representation of sovereign currency', such as
those backed by other digital assets (e.g. BTC, ETH, XRP, etc.) or software-based algorithms (e.g. Terra / Luna), are not considered within the
scope of this report.
• As regulations, standards, and frameworks continue to rapidly evolve, the definitions and insights presented in this report represent our findings
at the time of its drafting. Hence, certain findings may become outdated or subject to change.
• Despite the possibility that certain stablecoin issuers may not be fully compliant with local, regional, or global standards / regulations at the time
of writing, this report presumes that all stablecoin issuers are subject to relevant regulations in their operating jurisdictions and are recognised
entities holding an e-wallet license (e.g., Stored Value Facility License in Hong Kong) or its equivalent.
3
ACRONYMS
List of Abbreviations
(By alphabetical order)
• AML: Anti-money Laundering • MAS: Monetary Authority of Singapore
• ADGM: Abu Dhabi Global Market • MiCA: Markets in Crypto-Assets
• CASP: Coordinated Activities on the Safety of Products • MPI: Major Payment Institution
• CBDC: Central Bank Digital Currency • MTL: Money Transmission License
• CTF: Counter-Terrorist Financing • NBFI: Non-banking Financial Institution
• DIFC: Dubai International Financial Centre • PSA: Payment Services Act
• DLT: Distributed Ledger Technology • PvP: Payment-versus-Payment
• DT*: Deposit Token • SC: Stablecoin
• DTT: Digital Trade Token • SCA: Securities and Commodities Authority
• DvP: Delivery-versus-Payment • SPI: Standard Payment Institution
• EPI: Electronic Payment Instrument • SVF: Stored Value Facility
• FI: Financial Institution • VARA: Virtual Assets Regulatory Authority
• FTSP: Fund Transfer Service Provider • VASP: Virtual Asset Service Provider
• HKMA: Hong Kong Monetary Authority
4
TABLE OF CONTENTS
Section 2 Definition 14
Existing Regulations 36
New Regulations 40
5
EXECUTIVE SUMMARY (1/5)
PROJECT OVERVIEW
• The focus of this landscape study is on wholesale adoption explorations of CBDCs, DTs, and SCs, including adoption challenges and the broader
market development outlook for key market participants.
• The following topics were covered: (1) definition and prospective use cases, (2) industry adoption outlook, (3) adoption challenges, (4)
organisational positioning, (5) the use of blockchain, and (6) regulatory development outlook.
• Our methodology included both primary and secondary research to ensure a comprehensive understanding of various wholesale use cases for
CBDCs, DTs, and SCs.
• For our primary research efforts, we interviewed 47 leading executives with relevant expertise across 29 organisations covering potential issuers
of stablecoins and / or deposit tokens [7], infrastructure providers [9], payment companies [3], intergovernmental organisations [3], law firms [3],
professional services firms [2], and academic institutions [2].
• The objective of this landscape study is to provide practical and applicable reference frameworks, an overview of key trends, and detailed
primary market intelligence to help steer continued healthy development of the financial markets.
DEFINITIONS1
• To converge on definitions of CBDCs, DTs, and SCs we explored their underlying characteristics, including technology, price stabilisation
mechanism, and issuing entity.
• For the purposes of this landscape study, we decided to focus our definitions specifically on DLT-based digital representation of sovereign
currency issued by central banks, regulated banks, and non-bank financial institutions.
• We excluded any other DLT-based assets that are neither being collateralised by nor directly referencing sovereign currencies, such as
algorithmic stablecoins.
1Given the ongoing discussion regarding the taxonomy and definitions of CBDCs, DTs, and SCs, the concluded definitions from the research findings are used solely for the purposes of this study and may be used as one of the reference points
6
EXECUTIVE SUMMARY (2/5)
ADOPTION EXPLORATIONS
• The commonality between CBDCs, DTs, and SCs is that they can be used for straight-through processing and end-to-end instant payments /
settlement, including PvP and DvP, combined with programmability.
• The adoption of blockchain / DLT has the potential to materially change the existing method of settlement for payments and regulated assets
(e.g. securities), both of which are key pillars of the financial markets.
• At the same time, well-rooted methods tend to be highly sticky and the incentives of self-disruption by existing incumbents and stakeholders in
traditional financial markets remains low.
• Despite this, many incumbents and stakeholders have shown willingness to explore blockchain / DLT for PvP and DvP to address existing pain
points, such as lengthy settlement times, lack of transparency, and high transaction costs.
• Other forms of programmability of money and payments are also an area of active experimentation, both by disruptors and incumbents.
• There is significant interest in adopting blockchain / DLT for wholesale financial operations across both public and private sectors .
• BIS initiatives such as Project mBridge (multilateral payment platform using CBDC), Jura (cross-border PvP and DvP using CBDC), Helvetia
(Domestic DvP using CBDC), Dynamo (programmability of SC in the trade finance context), and Genesis (tokenised bonds with programmed
delivery of carbon credits) are examples of such explorations.
• Many financial institutions are actively exploring the adoption of DLT-representations of fiat currency in both PvP and DvP scenarios, with
promising developments being observed in the trade finance and fixed income space.
• Non-banking industry players, particularly those involved in international trade, are also actively exploring wholesale use cases of CBDCs, DTs,
and SCs to address existing pain points associated with working capital.
7
EXECUTIVE SUMMARY (3/5)
MARKET DEVELOPMENT
• As with any new technology, institutions tend to execute their technology initiatives in silos, given fundamental differences in corporate
strategies and operating procedures.
• Recognising this challenge, various initiatives are underway to connect these "walled gardens“ – in short, leading financial market infrastructure
players and technology providers are looking to address challenges around limited interoperability, including by offering aggregation platforms,
standardised messaging guidelines, and relay chains, among various other initiatives.
8
EXECUTIVE SUMMARY (4/5)
REGULATORY PERSPECTIVES
• While there is significant interest in the adoption of blockchain / DLT for wholesale financial operations, there are several regulatory challenges
that need to be addressed.
Existing Regulations
• For example, one of the first steps in blockchain / DLT adoption is the selection of a blockchain / DLT protocol, in which we identified limited
industry converge, stemming from different views on the potential of various blockchain types and, ultimately, how the development of the
industry will unfold.
• One of the key regulatory considerations hindering adoption is how compliance with anti-money laundering (“AML”) and counter-terrorist
financing (“CTF”) sanctions rules can be effectively achieved, given the universal availability of these digital assets.
• Entities we spoke with generally preferred entity-level AML to be implemented (vs. asset-level AML) in order to limit operational complexities,
while better controlling the legal responsibilities / consequences across the ecosystem.
New Regulations
• CBDCs and DTs benefit from existing legal and regulatory frameworks that provide market participants with sufficient regulatory clarity; in
contrast, SCs are a relatively new concept, necessitating the development of new regulations or the adaptation of existing ones.
• Given that CBDCs, DTs, and SCs are often discussed in parallel, regulatory clarification across all three is necessary for organisations to further
explore wholesale use cases. And we are seeing more regulators around the world actively endorsing real-world use cases, ensuring investor
protection, etc.
• Despite these efforts, inconsistencies in legal taxonomies and licensing requirements are hampering adoption efforts, with organisations calling
for greater regulatory convergence and cross-jurisdictional harmonisation.
• While achieving regulatory harmonisation may be idealistic, it is important for regulators and policymakers to foster closer cooperation and
coordination support greater interoperability with respect to final settlement for cross-jurisdictional wholesale cases involving PvP and DvP.
9
EXECUTIVE SUMMARY (5/5)
NEXT STEPS
Market Facilitators: Regulators / Policymakers
• Regulatory bodies have been actively publishing consultation papers outlining their approach to digital assets. However, notable discrepancies
in terms of legal taxonomies, definitions, and responsibilities persist across jurisdictions, particularly with respect to stablecoins.
• Greater regulatory cooperation and coordination efforts to support cross-jurisdiction interoperability remains extremely important, enabling
more responsible and sustainable progress by market participants.
Market Stakeholders: Banking Institutions / Non-Banking Institutions / Financial Market Infrastructures / Payments Companies
• We have observed a growing interest in the adoption of CBDCs, DTs, and SCs by major banking and non-banking institutions across various
jurisdictions.
• We recognise that both technology and regulation are in their early stages of development, which may lead to siloed initiatives within individual
"walled gardens“.
• Despite industry convergence challenges, we encourage institutions to keep a close eye on potential interoperability solutions that could unlock
the full potential of this new asset class in the years to come.
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SECTION 1
PROJECT OVERVIEW
RESEARCH APPROACH
By conducting interviews with key industry stakeholders from across the globe, from banks to academic institutions,
supplemented by detailed secondary research, we were able to capture a wide range of perspectives on the wholesale
adoption explorations of CBDCs, DTs, and SCs
Interview Participants Interview Participants
By Organisation, Count = 29* By Individuals & Jurisdiction, Count = 47
SCs / DTs Gain insights into the current initiatives, priorities 26%
of, and challenges facing key market participants
around blockchain asset adoption
9
INFRASTRUCTURE France 1
PROVIDERS
75%
U.K. 9
Understand the current role and future plans of 21%
PAYMENT
COMPANIES 3 payment companies around upcoming changes
related to blockchain adoption
50% Australia 4
Comprehend the perspectives of regulators,
INTERGOVERNMENTAL
ORGANISATION 3 policymakers, and central banks towards CBDCs,
DTs, and SCs
China 1
MARKET FACILITATORS
Philippines 1
Digest the complexities of CBDCs, DTs, and SCs
PROFESSIONAL
SERVICES 2 from a professional services perspective (e.g.
accounting, bookkeeping, etc.)
Singapore 5
0%
Discuss high-level perspectives on CBDCs, DTs, and
ACADEMIC
INSTITUTIONS 2 SCs from a regulatory, business, and other relevant
standpoints
% Respondents by Region
Total 47
APAC EMEA APAC
*Theproject team shortlisted and conducted interviews with the most relevant organisations: high-profile market stakeholders and intermediaries that are pioneering the exploration of potential use cases for CBDCs, DTs, and SCs
Source: Interviews, Quinlan & Associates analysis
12
KEY TOPICS & Our research focused specifically on the wholesale adoption explorations of CBDCs, DTs, and
QUESTIONS SCs, covering a range of key topics; from the definition of these digital assets to the broader
regulatory development outlook
Commercial Correspondent Commercial Out of public, private, and consortium blockchains, which
Bank Bank Bank Adoption
do you think will be most popularly deployed for
To provide an understanding of the Outlook
wholesale SC / DT use cases and why?
above, the report covers the following
topics, which were used as the overall How would you rank the following business-specific
Adoption
guideline when conducting our interviews: adoption challenges for wholesale use cases of CBDCs,
Challenges
DTs, and SCs by their potential level of difficulty?
• Definition of CBDCs, DTs and SCs;
How do you envision your organisation to be positioned
• Prospective use cases; Organisational
Corporate Interoperability Corporate if the broader adoption of wholesale CBDC / SC use
Client Platform Client Positioning
cases takes place?
• Industry adoption outlook;
Why do you believe blockchain / DLT technology, despite
• Adoption challenges; OUT OF SCOPE The Merits of
its technological complexity and lack of compatibility
Blockchain
• Organisational Positioning; with the existing infrastructure, should be leveraged?
• The case for blockchain adoption Regulatory
What are the regulatory clarifications or frameworks that
(vis-à-vis other technologies); and Retail Retail need to be put in place to facilitate responsible adoption
Outlook
Users Users of SC / DTs?
• Regulatory development outlook
(between various jurisdictions). Money Movement Instructions
13
SECTION 2
DEFINITION
SCOPE OF This scope of this study was limited to blockchain / DLT representation of digital forms of
DEFINITIONS sovereign currency issued by central banks, regulated banks, and non-bank financial institutions
1 2 3
CBDCs; (2) SCs; and (3) DTs, the
underlying characteristics, spanning: (a)
technology; (b) price stabilisation
mechanism; and (c) issuing entity, which
set them apart, were explored: TECHNOLOGY PRICE STABILISATION MECHANISM ISSUING ENTITY
• Technology: using blockchain / DLT or DLT BASED SOVEREIGN CURRENCY PUBLIC INSTITUTION
not. 1 Usage of blockchain technology to power 1 Backed by fiat or claims on regulated 1 Issued and governed by a government /
the underlying infrastructure banking institutions or central banks quasi-government authority
• Price Stabilisation Mechanism: (1)
fiat-based; (2) principal-based; or (3) NON-DLT BASED FULLY FIAT-BACKED PRIVATE INSTITUTION
algorithmic; and 2 Usage of non-blockchain technology to 1.1 A 100% reserve ratio, in the form of 2 Issued and governed by a non-
power the underlying infrastructure cash or other satisfactory securities governmental organisations
• Issuing Entity: (1) public institution or
FRACTIONALLY FIAT-BACKED BANKING INSTITUTIONS
(2) private institution.
1.2 A partially backed offering, with a 2.1 A well-regulated and recognised
reserve ratio of below 100% banking institution
15
DEFINITION: There is broad alignment on the definition of CBDCs, DTs, and SCs, in that the liability must lie
BY ISSUING ENTITY with the respective issuing entity, albeit with some variations (e.g. the level of backing,
jurisdiction-dependent issuing entity, and interest / non-interest-bearing nature)
By a Payment Company
“There are examples of bank-issued SCs, so 1Subject to future regulation; 2Non-banking Financial Institutions; 3See for example: Industry Letter - June 8, 2022: Guidance on the Issuance of U.S. Dollar-Backed Stablecoins | Department of Financial Services (ny.gov).
issuance is not restricted to NBFIs.” Source: Interviews, Quinlan & Associates analysis
16
STRUCTURAL DTs are different from CBDCs and SCs in that they are commercial bank liabilities. This inherent
DIFFERENCES difference makes DTs more challenging to implement compared to the other two digital assets
50
17
SECTION 3
ADOPTION EXPLORATIONS
OVERVIEW OF As CBDCs, DTs, and SCs may perform the functions of account-based money in a more efficient
PVP AND DVP manner, the key wholesale use cases of these digital assets centre primarily around PvP and
DvP settlement and programmability
KEY OBSERVATIONS Payment vs. Payment (“PvP”) Delivery vs. Payment (“DvP”) CBDC / SC Process
Illustrative Diagram Illustrative Diagram*
PvP and DvP settlement arrangements Existing Process
require both parties involved in a
transaction to fulfil their obligations prior 1 2
to settlement as a way to mitigate 1 2 2
settlement risk. Bank A Bank B 2
19
ADOPTION & Although the adoption of blockchain / DLT technology may be met with resistance from
PAIN POINTS (1/2) intermediaries that stand to lose some of their current fees, increased flows (as a result of
reduced frictions) and new products and services can benefit innovative intermediaries
Clearing
House Beneficiary
RELEVANT QUOTES Neutral / Dependent
HIGH TRANSACTION COST
By a Payment Company Challenged Intermediary access fees are often
“The current system suffers from a lack of passed on by banks and hence incurred
transparency, which blockchain can Money Movement
directly by end customers
resolve.” Instructions
Corporate Corporate
By a Digital Assets Player Client A Client B Potential Disintermediation
“Traditional financing operates on the
correspondent model, making it more
expensive than using SCs, which allow for
direct P2P transactions.” Source: Interviews, Quinlan & Associates analysis
20
ADOPTION & Similarly, the adoption of blockchain technology for DvP settlement could be inherently
PAIN POINTS (2/2) disruptive to certain market stakeholders, such as brokers and clearinghouses, but it has the
potential to bring significant improvements to current settlement processes
SETTLEMENT BODY
(e.g. clearinghouse, banks), investors and
brokers are often kept out of the loop
21
POTENTIAL BENEFITS There are four notable potential benefits that blockchain technology can bring to traditional
OF BLOCKCHAIN financial markets, with the enablement of programmability being the most impactful one in
terms of addressing existing industry pain points
RELEVANT QUOTES
By a Banking Institution
“Blockchain is a game-changer; everything
can be represented as a standard token and Node D Node C Investor C Investor D Investor B
can be exchanged.” Disintermediation
22
KEY BENEFIT: Despite the benefits of smart contracts in addressing transaction inefficiencies / costs, some
PROGRAMMABILITY stakeholders (e.g. central banks) remain hesitant to accept the risks associated with
programmability. This aspect can be left to the private sector1
23
NOTABLE An increasing number of institutions are exploring the adoption of CBDCs, DTs, and SCs across
INITIATIVES a wide range of wholesale use cases, including PvP and DvP. Industry players are focusing on
PvP use cases, particularly for trade / SME finance, micro-payment, and remittance
INDUSTRY
10 10
providing near real-time liquidity in a 9
10
cost-effective manner.
PLAYERS
3
• Tokyo Kiraboshi Financial Group, 0
Minna no Bank, and the Shikoku Steps 2016 2017 2018 2019 2020 2021 2022 2023
Bank: Three major Japanese banks are Industry participants are leaning towards adopting
exploring the issuance of their own SCs Pilot - 1 - 3 3 11 6 - CBDCs, DTs, and SCs for trade and SME finance. In
on a public blockchain. PoC2 - 1 1 2 3 11 13 3
the case of SCs, cost reduction and efficiency may
be gained in the areas of micro-payment and
Amidst these ongoing developments, Research 3 8 8 9 13 40 52 7 remittance
both the public and private sector have
been eager to capitalise on the
opportunities presented by CBDCs, DTs, 1The graph below shows a total of 198 initiatives, which accounts for the initiatives that have progressed from research to either PoC or pilot stage; 2Proof-of-concept.
and SCs Source: CBDC Monitor, Interviews, GSBN, Linklogis, Sygnum, CoinDesk, MakerDAO, NAB, HSBC, Credit Suisse, Quinlan & Associates analysis
24
CBDC WHOLESALE Considering the vast potential associated with the adoption of CBDCs, DTs, and SCs, the BISIH is
USE CASES actively experimenting with and piloting different initiatives focused on various wholesale use
cases
PvP
DvP
1The list of wholesale use cases is not exhaustive; use cases showcased here are select examples only; 2Project examples are not exhaustive; 3assuming stablecoin is issued by commercial banks / financial institutions.
Source: Interviews, BIS, Quinlan & Associates analysis
25
PVP CASE STUDY: As part of BISIH project Dynamo, the Digital Trade Token (“DTT”) explored how to tackle the
TRADE FINANCE SME trade financing gap through programmability and improved data transparency
26
DVP CASE STUDY: As a follow-up to BISIH project Genesis, Goldman Sachs, in collaboration with the HKMA,
FIXED INCOME facilitated the primary issuance of HKD 800 million of tokenised green bonds for the HKSAR
government, which was settled on a DvP basis, leveraging its tokenisation platform, GS DAP
*Hong Kong’s clearing and settlement system for debt securities owned by the HKMA.
Source: Project Genesis (link), HKMA, Digital Assets, Quinlan & Associates analysis
27
SECTION 4
MARKET DEVELOPMENT
THE INEVITABLE Developing a consistent, industry-wide view on technological initiatives can be challenging,
CHALLENGE given it requires significant alignment across various organisations’ priorities. As such, siloed
development and experimentation is common in early phases of technology development
1
Expecting technology adoption to happen Financial institutions have varying levels of
• United States: Project Hamilton
in a unified manner, with standardised Consolidated understanding and differing objectives associated • Switzerland: Project Helvetia
House-View with technological initiatives that are aligned with Singapore: Project Orchid
technology and practices, is highly their internal and external business needs
•
idealistic.
Operating Procedures
2
[CROSS-JURISDICTION] CBDC INITIATIVES
Variances in decision-making processes and
As such, it is evident that current resource allocation can lead to differences in • France & Switzerland: Project Jura
blockchain initiatives, especially those operational procedures, which can result in • Hong Kong, Thailand, UAE1, and PRC: Project mBridge
focused on wholesale use cases, are being varying implementation timelines
• UAE & Saudi Arabia: Project Aber
Blockchain Compliance
developed independently / in silos. Types Standards Level of Risk Tolerance • Australia, Malaysia, SG, and South Africa: Project Dunbar
3
Financial institutions are inherently risk-averse
There are a number of examples across: due to their obligation to maintain a high level of
security and compliance, resulting in differences
[INTRABANK] BLOCKCHAIN INITIATIVES
• Single-jurisdiction CBDCs. in system maturity and internal standards
• J.P.Morgan: For internal corporate banking activities
• Cross-jurisdiction CBDCs. Legacy Systems
4
• Santander Bank: For cross-border payment solutions
Messaging Foreign
• Intrabank blockchain initiatives; and Formats Currency Provision
Many FIs have legacy systems that are difficult to • HSBC: For payment within its balance sheet
integrate with new technologies, which can lead
• Interbank blockchain initiatives. to differing opinions on how to prioritise various
technological initiatives
[INTERBANK] BLOCKCHAIN INITIATIVES
Reluctance to Share Proprietary Information
5
RELEVANT QUOTES Sharing proprietary information on internal
• J.P.Morgan: Onyx
• Marco Polo Network
By a Payment Company Data Settlement technological initiatives may discourage industry-
wide alignment because institutions may be • Contour
“Developing a house view is impossible Requirements Requirements
hesitant to give up their competitive edge • Project Ubin: Singapore
because each organisation would have to
consider a fit-for-purpose technology that
meets their own privacy, scalability, and
overall performance needs.” Source: Interviews, Quinlan & Associates analysis
29
INTEROPERABILITY As interoperability is key to the broader adoption of CBDCs, DTs, and SCs, a number of FMIs
SOLUTIONS that facilitate settlement, as well as leading technology providers, are developing their own
interoperability platforms
30
CASE STUDY: The concept of an RLN aims to achieve finality of settlement between participants (e.g.
RLN commercial banks, central banks, etc.) over a shared ledger, which is to be operated by a
regulated FMI
TREASURY CHECK
4
Commercial Bank A Central Bank Partition: Bank A Partition:
Master Account Bank A Wallet – wCBDC* Bank A Wallet – Token A Commercial Bank A ensures that sufficient wholesale CBDC is
5
available in its RLN Wallet
31
CASE STUDY: The UDPN aims to solve the issue of interoperability by establishing a regulated payments
UDPN network on a permission-based blockchain that can support regulated digital currencies on all
technical platforms
It operates as a co-governed platform, CBDC (Hybrid Model) 1st Jun 31st Dec
enabling third-party smart contract
deployment and execution for enhanced Core Functionalities
transparency and time / cost efficiency.
Transaction Node Financial Institutions Digital Currency Transfer & Swap 15th Mar 15th Jun
Although the UDPN does not directly (Gateway) (Liquidity Provision)
serve end-users, it grants relevant entities Digital Currency Payment Gateway for E-Commerce 5th Apr 15th Jun
access to its system that equips them with Digital Asset Tokenisation 20th Apr 30th July
capabilities, such as digital currency
transfer, swaps, and many more. Validator Node Alliance Members
(Message & Content Validation) (Blockchain Operation) User Experience
As the UDPN is linked with accounts and
wallets on other SC and CBDC systems for Enabling Gasless Transactions using Stablecoins* 20th Mar 15th Jun
facilitation purposes, all transactions are Purchasing Digital Currencies with Fiat Money 1st Apr 15th Jun
executed and recorded within their
Business Owners Audit & Reporting Node Auditors & Regulators Facilitating Foreign Exchange on Digital Currencies
respective CBDC or stablecoin systems. (FIs / NBFIs / Industry Players) (Read-only Access Database) (Oversight)
31st Apr 31st Oct
Compliance-related Functionalities
Travel Rule 10th Mar 15th Jun
Business System Business Node
(Governed by Biz Owner) (Gateway) Cross-institution KYC Verification 15th Apr 15th Jun
32
CASE STUDY: As a globally interoperable and open platform, Partior enables atomic clearing and settlement
PARTIOR of programmable money across jurisdictions, linking with RTGS and other networks that may
not be operating 24/7
1
INITIAL ONBOARDING
interoperable with forthcoming CBDC
Partior onboards global transaction banks that handle most
networks. of the cross-border clearing services, as well as a settlement
By being a part of the Partior network, USD Settlement SGD Settlement bank for each of the major currencies. into its network
Bank Bank
financial institutions can perform around-
PAYMENT INSTRUCTION
2
the-clock, atomic settlement of currencies
When Corporate A sends an instruction to Bank B to pay a
and securities, with end-to-end 2 1 2
certain amount to Corporate B, the same standard message
RTGS & RTP
transaction visibility. is instantly directed to the Partior network, the two
settlement banks, and Bank B
As a result, joining Partior allows financial
1
institutions to tackle major pain points
3
INSTRUCTION EVALUATION
experienced by their end corporate clients Partior Bank A conducts the necessary sanction checking on
in cross-border settlements. Corporate A, Bank B and Corporate B (intended recipient),
and holds the amount of deposit balance of Corporate A
1 2 2 REAL-TIME SETTLEMENT
4
3 Upon checking, Partior enables Bank A to send money to
4
Bank B in real time without having to go through
Bank A Bank B
correspondent banks, therefore shortening the settlement
time with centralised clearing in the Asian time zone
2 3 2 5
5
FINAL MONEY MOVEMENT
After receiving the funds from Bank A, Bank B transfers
the amount to Corporate B’s deposit account, thus
Corporate A Corporate B completing the final settlement
33
CASE STUDY: Interoperability can be achieved in various ways (and by various means), such as by
ISO 20022 standardising messages, with several FIs working closely with SWIFT to replace its MT
messaging standard with ISO 20022, facilitating real-time, cross-border payment settlement
- Comprehensiveness: Relevant data Previous Instructing Agent Agent immediately prior to the instructing agent
(e.g. unique invoice identifier, Previous Instruction Agent Account Unambiguous identification of the account of the previous instructing agent
conditions, involved agents, etc.) of
more than one associated transaction Intermediary Agent Account Unambiguous identification of the account of the intermediary agent at its servicing agent
can be embedded in a single message Creditor Agent Account Unambiguous identification of the account of the creditor agent at its servicing agent
for reconciliation.
Ultimate Debtor Ultimate party that owes an amount to the (ultimate) creditor
ISO 20022 can be adopted as a Initiating Party This can either the debtor or a party that initiates the credit transfer on behalf of the debtor
standardised messaging protocols for
digital assets transactions. Ultimate Creditor Ultimate party to which an amount money is due
1Set of characteristics shared by all individual transactions included in the message; 2Specifies the details on how the settlement of transaction(s) between the instructing agent and the instructed agent is completed.
Source: Interviews, ISO, SWIFT, Citi, Quinlan & Associates analysis
34
SECTION 5
REGULATORY PERSPECTIVES
SECTION 5.1
EXISTING REGULATIONS
EXISTING RULES & Across the eight key activities identified by the FSB for SCs, many of which are relevant to DTs,
STANDARDS many jurisdictions across the globe have already established regulations, supplemented by
global standards endorsed by prominent IGOs
KEY OBSERVATIONS Activities in a Stablecoin Arrangement Operational Design Element FATF1 Basel PFMI4 IOSCO
• The rules covering the types of entities, the
The Financial Stability Board ("FSB") Establishing rules governing
protocol for validating transactions, and the 2 5
delineates eight key activities involved in a the stablecoin arrangement
management / ownership of the reserve assets.
stablecoin arrangement, designed to (1) • The mechanism through which stablecoins may
assess potential vulnerabilities, (2) identify Issuing, creating, and
be issued or created, and subsequently destroyed 3 6
mitigation measures, and (3) map out destroying stablecoins
by one or more entities / protocols.
relevant international standards. • The activities of managing the underlying assets
Managing
(e.g. financial assets, crypto assets, etc.) that are 7
It is important to recognise that many of reserve assets
"backing" the value of a stablecoin.
these activities, such as issuing digital
• The activity of holding the assets that are
assets, managing reserve assets, and Providing custody / trust
"backing" the value of a stablecoin by either 8
operating the infrastructure, are also services for reserve assets
the issuer or other entities.
pertinent to the operations of DTs. • A blockchain / DLT protocol determining roles in
Operating
It is noteworthy that numerous and access to the system: permissioned-based vs.
the infrastructure
jurisdictions have already instituted permissionless.
applicable regulations (e.g. AML / CTF, • The mechanism by which a transaction is
Validating
authorised and validated by validator nodes
data privacy, investor protection, etc.) to transactions
(e.g. proof-of-work, proof-of-stake, etc.).
supervise these activities. Furthermore,
• Cryptographic wallets storing private and public
there are global standards, principles, and Storing the private keys
keys that are used to digitally sign transaction
recommendations established by the that gives access to stablecoins
instructions.
Financial Action Task Force ("FATF"), BIS, • The activity of purchasing and exchanging a
and the International Organisation of Exchanging, trading, reselling,
stablecoin with fiat currencies (or a stablecoin) 9
Securities Commissions ("IOSCO") that and market making of stablecoins
with other stablecoins or crypto-assets.
regulate these activities.
Applicable - Dependent Not Applicable
Respective IGOs continue to evolve
relevant global standards as the market 1VariousFATF Standards covering AML / CTF guidance;
gains insights from various adoption 2Basel
Framework and associated principles for supervision and colleges; 3Basel Framework and Principles for the sound management of operational risk;
exploration efforts.
4CPSS-IOSCO Principles for Financial Market Infrastructures (“PFMI”);
5IOSCO Principles Cross-Border Supervisory Cooperation; 6Principles for the Regulation of Exchange Traded Funds; 7Liquidity Risk Management & Policy Recommendations for MMFs;
8Recommendations Regarding the Protection of Client Assets; 9Principles 13-15 & 30-39.
Source: FSB – Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements: Consultative document
37
BLOCKCHAIN TYPES / Throughout our interviews, we have observed a preference for private / consortium blockchains
REG. IMPLICATIONS in the context of wholesale adoption, primarily due to the greater ease to comply with existing
standards and control measures imposed on various wholesale financial activities
KEY OBSERVATIONS
One of the key initial stages in blockchain INTERVIEW FINDINGS NOTABLE CHARACTERISTICS
adoption is the choice of a blockchain
protocol, and it is here where we have Level of Preference Supporting Views Opposing Views Ownership of Network Participation Level of Control
(% Responses, n = 29) (Aggregated) (Aggregated) (Protocol) (Node & Network) (On-chain Activities)
observed a lack of industry convergence
begins, given the divergence in views on
Private / Consortium Blockchain Most enterprise Building a consortium High
the potential benefits (and limitations) of adoption explorations or working with a Through greater
different types of blockchains and how could be supported by vendor can be a time- • Single Entity (Private) Only verified by a centralisation of
the wider industry will evolve. private blockchains, consuming and • Selected Entities single or selected governance / control, at
48% which are relatively expensive process. (Consortium) group of entities the cost of potential
One of the key differences between (1) easier to maintain and Scalability is also manipulation of on-
private / consortium blockchains and (2) manage highly questionable chain data and activities
public blockchains is that ‘blockchain
native (i.e. on-chain) activities’ on the Anyone who Low
Public Blockchain Public blockchains Public blockchain may
latter are anonymous in nature, which wishes to On-chain activities are,
have high resilience fall short in complying by nature, irreversible
makes regulatory compliance challenging. and robust governance, with AML regulations, Nobody
participate as a
•
node or leverage and anonymous - with
Considering that regulation is activity with low costs and the as they lack necessary (Theoretically) the option to create new
24% the selected
ability to process tools and /or compliance protocols
rather than technology based, the transactions quickly mechanisms
network’s
capability (see example on travel
principle of "same risk, same regulation" is rule on the next slide).
emphasised by policy setters.
Blockchain Agnostic
Since the technology is still in its early stages of
development, it is important to remain cautious
when drawing conclusions. However, we remain
28% open to exploring new technologies to meet the
evolving demands of the market
Regulatory Concern
Source: Interviews, Quinlan & Associates - Cracking the Code: The Outlook for Digital Securities (2021)
38
CASE STUDY: To adhere to FATF guidance on AML / CTF and Travel rules, some wallet providers have
ENTITY-LEVEL AML introduced a hosted wallet with various functionalities, while other solutions enable the
automated verification of KYC information
1
VASPs are required to
blockchains, there are several compliance Wallet perform KYC on their
Unhosted Wallet 4
solutions available in the market, users
including: Upgrade
Public Blockchain
2
• (1) Hosted Wallet: The selected Traceable VASP A registers on Day
0 and sends out a
solution provider offers corporates Untraceable 2 3 transaction RFI
access to a range of compliance VASP B
VASP A Discovery / Transaction
functions through its ‘Institutional Layer
(Sign up = T+2 months)
3
(Sign up = T)
Although VASP B joins 2
Wallet’ offering. months after, it receives
the RFI from Day 0
• (2) Data Privacy Solution: The 1 1
selected solution provider provides Example’s Upgrade Example’s
4
information on a transaction, Wallet Institutional Wallet
VASP B sends travel rule
data from Day 0 RFIs to
regardless of when the receiving Virtual VASP A directly
Asset Service Provider (“VASP”) signs Corporate A Corporate B
up, enabling compliance with the travel
Wallet Example’s Example’s
rule. CHALLENGES SOLUTION
Features Wallet Institutional Wallet
39
SECTION 5.2
NEW REGULATIONS
REGULATORY Interviewees acknowledged the presence of gaps in the present regulatory regime,
HURDLES emphasising the importance of – and the urgent need for – further clarity around legal
taxonomies and responsibilities, as well as regulatory harmonisation across jurisdictions
RELEVANT QUOTES
By a Professional Services Provider
LEGAL RESPONSIBILITY
“Accounting for digital assets is messy
because the terms of the coins are different It is essential to consider the The legality of these digital
(i.e. not standardised). (The industry is) not legality of electronic assets remains highly uncertain Continued regulatory cooperation and coordination
sure which accounting model should be transactions and smart in many jurisdictions, which is needed to ensure a certain level of
pushed for certain tokens” contracts and to determine poses challenges for businesses interoperability to support cross-jurisdictional
the responsible party for looking to facilitate their
By a Supranational Organisation wholesale adoption.
addressing legal disputes. adoption.
“It is important to note the legality of
electronic transactions and smart contracts,
determining who should be taking up
responsibility for legal disputes” Source: Interviews, Quinlan & Associates analysis
41
NEW REGULATORY While there are established regulatory frameworks in place for CBDCs and DTs, SCs are a
DEVELOPMENT relatively new area of focus, with governments around the world actively investigating ways to
establish appropriate regulatory frameworks for SCs
Regulators around the world are actively In a recent release of the conclusion to a discussion paper, Hong Kong highlighted its regulatory stance
• Conclusion of Discussion Paper on Crypto-assets &
on SCs (e.g. aiming for an activity-based approach, allowing non-authorised institutions to issue), with
working to devise or revise regulatory even greater clarity anticipated later this year
Stablecoins (2023)
frameworks for SCs - evident by recent
developments, such as Hong Kong's
While a regulatory framework for SCs is still in the consultation phase, Singapore has clearly mapped out • Consultation Paper on Proposed Regulatory Approach
publication of a consultation paper on regulations in a detailed manner for Stablecoin-Related Activities (2022)
stablecoins, as well as Japan's plan to lift
the ban on foreign stablecoins. Japan’s regulations on domestic SCs1 and foreign SCs are now comprehensive. Amendments to the
Payment Services Act and other statutes were passed in 2022 for purposes of introducing a new • Amended Payment Service Act
However, there are still areas of regulatory framework for SCs, which came into effect on June 1, 2023 with respect to the relevant (Passed: 2022, Effective: 2023)
uncertainty that require further clarity, regulations, public notices, and guidelines.
particularly around the legal taxonomy of While there is currently no comprehensive nationwide2 regulatory framework for SCs in the U.S., federal
• SEC's potential investigation on Binance USD (2023)
lawmakers have been introducing various bills to Congress. Uncertainties remain with respect to whether
SCs in various jurisdictions, even as SCs should be regulated as securities under the current federal securities regulatory regime3 or regulated
• NY DFS’ Virtual Currency Guidance (2023)
• Stablecoin Trust Act (2022-)
reserve requirements for SCs are generally as virtual currencies pursuant to a tailor-made new regulatory regime for digital assets.
well-established in most jurisdictions. The U.K. has been proactive in its efforts to establish clearer regulations for digital assets, specifically
• Future Regulatory Regime for Cryptoassets (2023)4
stablecoins. These efforts include making significant progress both through amending existing e-money
• Financial Services and Markets Bill 2022 (Not yet
and payment legislation, recent consultations, and the introduction of the Financial Services and Markets
adopted)
Bill 2022 which, if adopted, will further amend the existing financial services regime.
RELEVANT QUOTES The European Union has clearly stated its support for the development of Euro-backed SCs, as outlined
in MiCA - one of the most comprehensive sets of regulations expected to be enforced this year - • Markets in Crypto-assets (“MiCA”) Regulations (2022-)
By an Academic Institution alongside other initiatives
“A liability framework needs to be put in
place for customer protection, liability for In the absence of a specific regulation in relation to SCs in the UAE, the classification of SCs under the
loss, etc.” legislation depends on the structure and intended use of the SC. In a recent guidance issued by the Abu • Stablecoin Regulations for Payments (2023-)
Dhabi Global Market (“ADGM”)5on virtual assets, SC is described as a blockchain-based token that is • Virtual Asset Issuance Rulebook (2023)
By a Banking Institution valued by reference to an underlying fiat currency or basket of assets.
“Regulations don’t dictate the use of
technology, as long as compliance checks
are in place.”
1SCs are categorised as Electronic payment instruments (“EPIs”), which comprise of (a) payment instruments, (b) prepaid payment instruments, (c) securities [including trust beneficial interests] and (d) crypto-assets; 2On
the state level, several states, including New York, Texas, and Nebraska, promulgated their own regulations and / or guidance on SCs. In the absence of dedicated national regulations and clear regulatory landscape,
stablecoin issuers have relied on state-based money transmission licenses; 3regulated in a way akin to bank regulation; 4three-month consultation ended in April with the UK government’s response expected shortly;
By a Payment Company 5According to the ADGM guide, the Financial Services Regulatory Authority position in relation to stablecoins is as follows: (a) permit only those stablecoins which constitute a fully backed 1:1 fiat token backed only by
“Most regulators are taking a similar the same fiat currency it purports to be tokenising, (b) fiat tokens are to be treated as a mechanism for storing value (e.g. e-money), and (c) issuers of fiat tokens for the purposes of facilitating or effecting payments are
treated as money services businesses. KWM expect the onshore regulatory position to follow the same position described above. In this case, SCs would fall under the licensable activities of the UAE Central Bank and
approach in being pro-consultation, taking not the Virtual Assets Regulatory Authority (“VARA”) or the Securities and Commodities Authority (“SCA”).
into account the private sector’s opinion.” Source: KWM (Hong Kong, New York, and London), Allen & Gledhill (Singapore), Nishimura & Asahi (Tokyo), Al Tamimi & Company (Dubai), Interviews, Quinlan & Associates analysis
42
STABLECOIN SCs are facing different legal taxonomies, licensing requirements, and business limitations
REGULATIONS (1/2) across jurisdictions
Licensing Requirement
E-Money / SVF* License -2 -5 6
Payment License -5
SC-specific License 3 -5 - 3
1AMLO VA exchange licence likely for exchanges; some remains unregulated; 2Subject to greater clarity in 2024; 3E-Money Licensees are expected to acquire stablecoin-specific license to issue stablecoin; 4The table is
only applicable to type II / III FTSP registrations that issues (a) payment instruments and (b) prepaid payment instruments classified as EPIs; 5Dependent on state-level requirements; 6In discussion to set up a single
licensing regime across the EU; 7The table below only feature VARA (Dubai). UAE Central Bank may issue relevant license, which will become clear when relevant regulations are issued in relation to the treatment of SCs.
*Stored Value Facilities; **Standard Payment Institution; ***Major Payment Institution; ****Fund Transfer Service Providers; *****Payment Services Act; ******Money Transmission License; *******Dubai International Financial Centre.
Source: KWM (Hong Kong, New York, and London), Allen & Gledhill (Singapore), Nishimura & Asahi (Tokyo), Al Tamimi & Company (Dubai), Quinlan & Associates analysis
43
STABLECOIN While SC reserve requirements are generally consistent across multiple jurisdictions, the
REGULATIONS (2/2) majority of these jurisdictions have not consistently outlined specific disclosure requirements
on SCs
Disclosure Requirements
Underlying Assets Value 1 4
Reserve Composition 1 4
Rights of Holders 1
Redemption Policies 1
Conflict of Interest 1
Amount in Circulation 1 5 -8
1Subject to greater clarity in 2024; 2As proposed in the Consultation Paper on Proposed Regulatory Approach for Stablecoin-Related Activities (2022); 3Linked to only a single fiat currency - either SGD or one of the G10
currencies; 4This assumes that this information will be covered in the proposed monthly disclosure (independently attested) and yearly audit of reserve assets; 5Typically required to explain the total issued amount and
the maximum issuable amount (if any); 6This is state-specific (New York) and included as an example of regulatory frameworks of a state in the U.S., as there is currently no federal regulations on stablecoins; 7Examples
include U.S. Treasury bills acquired by the Issuer three months or less from their respective maturities, reverse repurchase agreements fully collateralised by U.S. Treasury bills, U.S. Treasury notes, and / or U.S. Treasury
bonds on an overnight basis, government money-market funds, and deposit accounts at U.S. state or federally chartered depository institutions; 8May be a component of the attestations by a registered accountant.
Source: KWM (Hong Kong, New York, and London), Allen & Gledhill (Singapore), Nishimura & Asahi (Tokyo), Al Tamimi & Company (Dubai), Quinlan & Associates analysis
44
REGULATORY Another notable regulatory challenge is the difference in the legal definition of settlement
HARMONISATION finality, which affects atomic, cross-border settlement through fiat-backed tokens in case of
payment revocation / insolvency issues
law or regulation.
2
1 4 3 Bank A sends out payment to Bank B,
but then forwarded a request to cancel
the payment due to insolvency
RELEVANT QUOTES
3
By an Academic Institution Corporate Corporate
Bank B records the settlement as final
“Finality of settlement is not a capability of and makes the necessary transaction
“
Client A Client B
“
the commercial / central banks, but it is a arrangements to Corporate B
legal issue as it is recognised differently by
different jurisdictions, which disrupts mass
≠ 4
adoption.” If a bank sends a payment instruction and If a bank sends a payment instruction
Bank A could return the money to
Corporate A, as legal transfer of money
By a Banking Institution then suspends payment / becomes insolvent, and thereafter suspends payment /
did not take place
it will not deem the payment as final and a becomes insolvent, it does not prevent /
“Technology cannot overcome legal and
” ”
chargeback / return could take place interfere with the settlement becoming final
regulatory issues associated with finality of
Outcome
settlement as some currencies may not Clause A Clause B
recognise finality, while others may not be
accepted by one jurisdiction due to the Finality of settlement is not achieved,
perceived lack of finality.” where payment on a multi-currency,
multi-asset basis does not proceed
By a Payment Company Delayed / Unaccepted Finality of Settlement
“The world lacks a global settlement layer
that can achieve legally certain settlement
finality, where transaction may not be
unwound through insolvency proceedings.” Source: HKMA, Reserve Bank of Australia, Interviews, Quinlan & Associates analysis
45
SECTION 6
LOOKING AHEAD
SUMMARY OF Given that CBDCs are M0, while DTs and SCs are M1, DTs and SCs carry higher counterparty risk
KEY FINDINGS
• CBDCs: Conceptually, given that CBDCs Issuer Central Bank Commercial Banks & NBFIs Commercial Banks
are M0, while DTs and SCs are M1, DTs Structure
and SCs carry higher counterparty risk.
Money M0 M1 M1
• Stablecoins: Due to unclear legal Type Liability Liability Liability
taxonomies and responsibilities across Equivalent Asset Fiat Cash Fiat Representation Bank Liabilities / Debt securities
jurisdictions (coupled with recent risk
Characteristics
events), banking institutions and
1:1 Backing (Backed by Central Bank) (Likely) (Unlikely)
payment companies remain more
Liquidity (Central Bank Liquidity) (Locked) (Unlocked)
hesitant to proactively explore
Intraday Float (Unavailable) (Unavailable) (Available)
stablecoins for their operations,
Atomic Settlement (Likely) (Likely) - (Dependent)
although digital assets players remain
open to further explore their use. Wholesale Use Case
• DTs: While banking institutions may Payment-versus-Payment (Applicable) (Applicable) (Applicable)
prefer DTs for liquidity and intraday Delivery-versus-Payment (Applicable) (Applicable) - (Dependent)
float benefits, the appropriate use and Regulation
legal taxonomy of deposit tokens in the Subject to Reg. Compliance (Existing regulations applied) (Existing regulations applied) (Existing regulations applied)
context of wholesale financial markets Regulatory Clarity (Existing regulation applied) (Further development needed) - (Clarification needed)
is still being investigated.
Observed Preference
It is likely that these three assets will
Banking Institutions Low High Low High Low High
continue to evolve in tandem, with new
adoption explorations and use cases Payment Companies Low High Low High Low High
emerging in the coming years. Digital Assets Player Low High Low High Low High
47
THE WAY Similar to any other technology-driven innovations, the advancements in wholesale financial
FORWARD operations through the adoption of CBDCs, DTs, and SCs are in their nascent stages; hence, it
will require extensive coordination by market facilitators and exploration by stakeholders
KEY OBSERVATIONS
• Market Facilitators:
To foster wholesale adoption of
emerging digital currencies, cross-
jurisdictional cooperation and
coordination efforts remain essential,
as it addresses discrepancies in legal
definitions and responsibilities across
Market Facilitators Market Stakeholders
jurisdictions. It will enable sustained (IGOs, Regulators, Policy Makers, etc.) (Banking Institutions, NBFIs, Industry Players, etc.)
progress for market participants and
boost the competitiveness of
jurisdictions aiming to become modern • Regulatory bodies have been actively publishing • We have observed a growing interest in the adoption of
financial hubs. consultation papers that outline their approach to digital CBDCs, DTs, and SCs by major banking and non-banking
assets. institutions across various jurisdictions.
• Market Stakeholders:
Growing interest in CBDCs, DTs, and • However, notable discrepancies in terms of legal • We recognise that both technology and regulation are in
SCs among banking and non-banking taxonomies, definitions and responsibilities persist across their early stages of development, which may lead to siloed
institutions indicates considerable the jurisdictions, particularly with respect to SCs.
potential of this emerging asset class.
initiatives within individual "walled gardens“.
Institutions should continue to pay • Regulatory coordination remains critical, enabling more
• Despite industry convergence challenges, it is important for
close attention to potential responsible and sustainable progress by market
institutions to keep a close eye on emerging interoperability
interoperability solutions, which will participants while enhancing the competitiveness of
solutions that are being developed, given their ability to
help to unlock the full potential of this jurisdictions seeking to establish themselves as new-age
asset class in the future. unlock the full potential of this new asset class.
financial hubs.
48
PROJECT PARTICIPANTS
We would like to thank the following colleagues at the Bank for International Settlements for their valuable feedback on this publication:
- Leonardo Gambacorta, Head of Innovation and Digital Economy, Monetary and Economic Department
- Rodney Garratt, Senior Advisor, Financial Stability Policy, Monetary and Economic Department
- Anneke Kosse, Senior Economist, Committee on Payments and Infrastructures, Monetary and Economic Department
- Sebastian Doerr, Economist, Financial Stability Policy, Monetary and Economic Department
- Tirupam Goel, Economist, Hong Kong Economics, Monetary and Economic Department
- Morten Bech, Head of Swiss Centre, BIS Innovation Hub
- Mike Alonso, Advisor, Swiss Centre, BIS Innovation Hub
We would also like to acknowledge the team at King & Wood Mallesons (Hong Kong, New York, and London), Allen & Gledhill (Singapore),
Nishimura & Asahi (Tokyo), and Al Tamimi & Company (Dubai), for their legal input on the Regulatory Perspectives section of this report.
49
Project Dynamo