BLOCKCHAIN
“TOKENISATION OF REAL-WORLD ASSETS COULD ONE DAY BE A MULTI-TRILLION- DOLLAR MARKET ”
YUVRAJ SIDHU PRINCIPAL CONSULTANT , LAB49
While for cryptocurrency , certain nodes on the network – miners – are tasked with ordering batches of transactions into blocks ( rewarded for their efforts with newly created crypto assets ), Kubli notes that blockchain doesn ’ t have to be used this way . “ It can be a ledger for virtually any type of data .”
Blockchain ’ s reach across the financial industry Kubli continues : “ While financial institutions such as BlackRock , Siemens and even HSBC are touting tokenisation as a paradigm shift for the economy , with vastly improved systems for delivery versus payment ( DvP ) settlements , current tokenisation platforms are not digitising the underlying liabilities or cash flows tied to the assets themselves .”
Most tokens have a simple embedded PDF that defines its terms and conditions , meaning human intervention is still required to calculate cash flows , which , according to Kubli , “ can introduce errors and discrepancies , and also prevents this digital capital from being truly automated ”.
As a result , Lab49 ’ s Principal Consultant Yuvraj Sidhu admits the mass adoption of blockchain in traditional financial services is still far off , “ especially in the institutional landscape , [ where ] regulatory uncertainty and questions regarding unproven tools and infrastructure have created barriers ”.
Yet , despite these barriers to adoption , Sidhu feels a need for secure , accurate and instantaneous settlement in the financial services industry is driving many banking institutions to explore ways of leveraging the benefits of blockchain .
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