Blockchain in the Digital Asset Ecosystem
This is an early look at how DLT is evolving the capital markets ecosystem. It details the ways that the established capital markets infrastructure is changing. This includes everything from the emergence of novel types of digital assets to operational changes. We start with the existing structure of capital markets and how legacy instruments and processes are digitizing. Three stages of the asset lifecycle are covered. We show that both pre-trade issuance and asset servicing have made the greatest gains to date, though custody is somewhat slower owing to the need to adhere to regulatory constraints. The final part of an asset lifecycle – post-trade processing – is where DLT has had somewhat limited inroads. We describe the reasons for this and why we expect it to change in the near future.