The integration of the financial services world and the world of Blockchain seemed a very long way off just two years ago. Yet consistently we see Blockchain technology being at the core of a number of projects in the UK’s FCA sandboxes. Indeed, we have recently seen Project Pyctor where ING Bank is working with ABN AMRO, BNP Paribas Securities Services, Invesco, Société Générale, State Street and UBS i.e. a cohort of European financial services heavyweights which have just been accepted into the FCA’s 6th sandbox. Interestingly, this group of companies have announced they are looking to build a “digital asset safekeeping and transaction services, with a focus on regulated security tokens issued either on private or public blockchain”.
Source: TeamBlockchain Ltd
Also, in this latest Cohort 6 is the highly-respected law firm, DLA Piper, which is proposing a RegTech platform that offers a rules-based methodology to digitally manage regulatory compliance with regards to the issuance of digital assets. Martin Bartlam, International Group Head of Finance & Projects and FinTech at DLA Piper, said recently, “ We are looking to create a much more efficient way for firms to navigate the complex rules and regulations around the issuing of digital assets, making it more structured for regulators and ultimately faster and cheaper for issuers”. Notably, DLA Piper is also involved in Project Pyctor as it looks to offer an institutional grade custody solution.
This unification of some of the world’s leading financial institutions offers more evidence that institutions are becoming more engaged with Blockchain technology and are considering ways to use both the technology and Digital Assets as more of their clients look to become involved in this asset class. However, it is not just commercial entities, but regulators too, who are looking to understand how and where these assets fit into the financial structure and how Blockchain technology may, indeed, be able to strengthen risk and compliance controls. Interestingly, much of this is happening in the world’s leading financial centre, London.
Another development showing endorsement of this sector is Komainu’s debut as a joint venture between Japanese bank, Nomura Holdings Inc, and cryptocurrency partners, Ledger and CoinShares. Komainu is proposing to offer custody services to other institutions for Digital Assets and cryptocurrencies, such as Bitcoin. Meanwhile, Korea’s largest bank, (Kookmin Bank) believes that the digital assets industry will continue evolving to include a wider range of digital assets, not only cryptocurrencies. Hence, it has teamed up with a couple of other firms to offer custody services, commenting that, “other traditional assets such as real estate, artwork, and other reified rights will be issued and traded on blockchain platforms.”
We are seeing institutions giving Blockchain technology and Digital Assets the seal of approval, and VC and angel investors are also being attracted to opportunities around Blockchain technology and the creation of Digital Assets, such as SpiceVC. The early stage equity funding platform, Stakeholderz, has had, on its regulated platform, a steady increase in the number of companies using Blockchain technology and/or looking at tokenisation. Dermot Hill, CEO of Stakeholderz, recently stated, “We are seeing more interest in businesses that are looking for capital and the right mix of experience from people with a proven track record to help them not only invest but work with them to grow the company. One project is Invluencer, which uses tokens at the centre of their offering to compound investment intelligence”. To this end, on the 21st August at 10.30am, Stakeholderz is putting on a webinar entitled ‘Blockchain and Tokenisation: What investors need to know’.
It would appear that we have reached an inflection point for all sectors of the commercial world to embrace Blockchain technology and see how this technology can impact on their day to day activities. Almost daily there is an announcement from major global corporations, and indeed even governments, which are using Blockchain technology and/or Digital Assets in various innovative ways, thus offering greater transparency, improved efficiency and often helping to improve trust in the data on which we all so much rely.