Insights from the World Bank, Euroclear and ICMA: The future of digital financial market infrastructure

Regulatory and technological changes are afoot that could result in substantial changes to the organisation of financial market infrastructure. With the UK’s Digital Securities Sandbox and the European Union’s Blockchain Pilot Regime, regulators are embracing the possibility that technology could redefine the roles of market participants. But these systems are of vital structural importance and cannot be redesigned lightly.

In response to these developments, during our two-day Digital money summit event, OMFIF’s Digital Monetary Institute convened key public and private sector delegates to examine the benefits to overhauling financial market infrastructure.

Lewis McLellan, DMI editor, was joined by Ahmed Faragallah, senior financial sector specialist, the World Bank, Georgina Jarratt, managing director and head of fintech and digitalisation, International Capital Market Association, Jørgen Ouaknine, group head of innovation and digital assets, Euroclear, alongside key participants including HSBC, Onyx by JP Morgan, CME Group, EY, Circle and more.

The session discussed the potential for distributed ledger technology to replace financial market infrastructure, including governance considerations and technical hurdles. We delved into the roles and responsibilities of individual capital market intermediaries and addressed what type of market participant is most appropriate to provide the plumbing of this future ecosystem. The path to connecting primary and secondary markets was also explored, with the conversation looking ahead at what infrastructure participants hope to achieve through tokenisation and multi-asset tokenisation projects.