A report published by The Depository Trust & Clearing Corporation (DTCC), Clearstream, Euroclear, and Boston Consulting Group (BCG) presents a new framework for interoperability aimed at enabling “secure and scalable deployment” of digital assets.
The joint report, released on Wednesday, March 4, argues that interoperability is key for cryptocurrencies to “realize their full potential” in traditional capital markets. The group emphasizes the need for open, neutral and reliable infrastructure to support the integration of what it calls “digital asset securities” (DAS) into mainstream finance.
In exploring the current state of blockchain interoperability, the report highlights the challenges of fragmentation across public and permissioned blockchains as layer 1 and layer 2 chains proliferate.
“This versatility is growing as it continues to become easier to launch new chains. Modular stacks and ‘rollup-as-a-service’ providers allow institutions to launch bespoke L2s with configurable data availability, privacy and privileges in weeks rather than years. ” states the report.
The study also highlights global regulatory fragmentation, which it claims increases the “structural inefficiency” of blockchain implementation in traditional capital markets.
“The operating model is evolving to a network of networks, with standards, gateways, and regulated service providers connecting on-chain objects to off-chain finance,” the report says.
The proposed framework also asserts that integrating digital assets into the TradFi system requires interoperability not only between blockchain networks, but also between L1 and L2, traditional bank ledgers, and the Central Securities Depository Ledger (CSD ledger). The report states:
“Interoperability can be defined as the ability to exchange assets between DLT and traditional ledgers while maintaining asset integrity, ownership, and lifecycle, and with full regulatory compliance.”
In December, DTCC received permission from the U.S. Securities and Exchange Commission (SEC) to pilot a tokenized version of securities it already owns, and later that month announced that the tokenization trial would use Layer 1 cantons for institutional investors.
DTCC, Clearstream, and Euroclear are leading post-trade services companies, providing settlement and custody solutions for securities across global markets.
As The Defiant reported earlier today, this effort aligns with other industry efforts, including Intercontinental Exchange’s strategic investment in OKX.
This article was created using an AI workflow.
