FMIs – historically, the linchpins of the financial system, facilitating clearing, settlement and record-keeping – are now supporting the integration of digital asset securities into the conventional financial fabric.
Digital Asset Securities Control Principles
By 2030, the tokenisation of global illiquid assets is projected to be a $16 trillion business opportunity. However, progress on institutional adoption has reached an inflection point as firms continue innovating in silos, with small-scale initiatives that fail to progress or prioritise broad ecosystem development. In this context, Financial Market Infrastructures (FMIs) have a crucial role to play.
We have partnered with DTCC and Clearstream – with the support of Boston Consulting Group – to lay out a blueprint for establishing an industry-wide digital asset ecosystem to drive acceptance of tokenised assets in the whitepaper ‘Building the Digital Asset Ecosystem'.
This paper introduces the Digital Asset Securities Control Principles (DASCP), which we have developed with our partners utilising our combined decades of experience to effectively manage regulatory compliance and reduce operational risks.
This set of principles outlines a safe and efficient ecosystem, identifies potential risks specific to digital asset securities and provides recommendations for controls to mitigate these risks.
The six principles that promote the successful adoption of tokenisation and digital asset securities are:
- legal certainty – ensuring operations comply with law
- regulatory compliance – encouraging alignment with regulatory frameworks
- resilience and security – developing robust infrastructure capable of resisting disruptions while protecting sensitive data
- safeguarding customer assets – implementing governance via smart contracts to manage assets securely
- connectivity and interoperability – facilitating transactions and flexible settlements across diverse networks
- operational scalability – striving for efficiency and cost-effectiveness through standardisation
In addition to the six core principles, the paper also presents a list of controls to help firms mitigate risks such as asset mismanagement or insufficient controls to govern smart contracts. Recommended controls include defining who can access smart contracts and maintaining a comprehensive record of digital asset events/transactions.
This whitepaper builds upon the foundation laid by our previous collaborative publication, 'Advancing the digital asset era, together'.
