Unlocking Liquidity with Regulatory Compliant Digi-Assets

March 10, 2021

By: The R3 Team


At CordaCon 2020, a high-level panel drawn from HSBC, Securitize.io, Agora-Digital Capital Markets and Moody’s Investors Service joined R3’s Carlos Arena to discuss the innovations under way in digital bonds.

The focus was on how to unlock liquidity with regulatory-compliant digital securities, by developing the ability to issue, trade, custody, service and potentially settle digital bonds on a distributed ledger. The discussion ranged across areas including tokenization, the benefits of digital bonds, the key stakeholders, and also what the roles are for incumbents, regulators and new market players.

A number of panelists highlighted the sheer scale of the opportunity on offer, mirrored by the vast size of the bond markets. “Technology has had limited impact for the last twenty-five years on many of the processes which support the creation, settlement, pricing and lifecycle events of bonds,” explained Agora’s Charlie Berman.

“Things have changed now. People have understood that it’s not about disintermediation, it’s about working collaboratively to build new platforms which are far more efficient.” – Gaurav Aggarwal, Head of DLT and Tokenization, HSBC

As the panelists emphasized, “doing things better” is not about sweeping away traditional bonds and replacing them with new digital native assets – but about building bridges and pathways between the old world and the future, which is nearer than many people think. Progress is being accelerated by the significant benefits on offer. Elizabeth Mathew of Securitize.io said: “The ability to manage the underlying asset or the credit better, and collectively have a single version of the transaction across different stakeholders, are key benefits. On the regulatory side, this is something that we have a working model for which we call the DS protocol, which is a set of smart contracts that automate the compliance layer.”

All the panelists provided equally fascinating perspectives on the DLT-enabled future of bonds. To hear them all, click here to view the panel session in full.