It was not so long ago that the ether of the payments world and the rostra of conference platforms crackled to the energy of the blockchain/distributed ledger technology payments revolution. The new technology was set to eviscerate payment and settlement infrastructures and usher in cheap, efficient, atomic, anonymous and perfectly secure transactions. Bitcoin and its cryptocurrency emulators would elbow aside state-controlled cash in retail payments. In capital markets, centuries-old exchanges with central counterparties would be rendered redundant by the democracy of DLT. In our first edition, Philip Middleton wondered whether the Financial services companies and technology pioneers jostled to announce spectacular new projects. And then it all went suspiciously quiet. The predicted revolution has not yet happened.
In this issue of the DMI Journal, we apply our loupe to capital markets and exchanges and ask whether blockchain, tokens and DLT could facilitate extensive repairs to the shattered post-Covid landscape. By and large, existing exchanges work very well in delivering complex trading networks with transparency, liquidity and security. To be sure, it is not all barren wastelands, with several discrete applications having seen the light of day. The Banque de France has run a successful pilot with BNP Paribas to pioneer a blockchain-based application to the trading of covered bonds. The experience of digital asset trading in the Nordics is described in this edition with an account of Project Glacier.