Over 30% of the industry using DLT in live production, finds ISSA survey, conducted by the ValueExchange with support from Accenture, Broadridge and VMWare.
ISSA (International Securities Service Association) has released the results of its third annual survey on the use of DLT (distributed ledger technology) in financial markets.
The survey – conducted by the ValueExchange with support from Accenture, Broadridge and VMWare – finds a “major upsurge” in the usage of DLT, with over 30 percent of the industry now using the technology in live production, a four-fold increase from 2021.
The upsurge appears to be driven strongly by organisations implementing capabilities to support cryptocurrencies and tokenised bonds, ISSA says.
The survey highlights a move away from experimentation with DLT to a focus on commercialisation in 2022, with 53 percent of projects now intended for live commercial usage. Firms are also facing less organisational resistance to deploying DLT.
According to ISSA, the majority of DLT projects are currently focused on facilitating new product launches and internal efficiencies, moreso than on creating market-wide efficiencies.
While there is still a focus on crypto, market participants are additionally focusing and launching solutions to tokenise a growing number of asset classes in the near future – with securitised assets, private equity and listed equities all set to grow significantly in usage and importance.
“DLT is clearly starting to deliver real results for the industry today and tokenising highly paper-based assets – such as securitised assets, mutual funds and private debt – is clearly yielding positive returns in 2022” said ISSA CEO Colin Parry. “Whilst performance against expectations may lag for securities that have already been dematerialised, the outlook for growing DLT-driven efficiencies in 2023 is clearly positive.”
Barnaby Nelson, CEO of the ValueExchange, said the value of DLT is growing, and that its use is widening from the traditional, perceived benefits of enabling atomic settlements and smart contracts to also include real time data processing and synchrony.
“With regulatory limitations still holding up 26 percent of DLT projects, the use of blockchains simply as a real time ledger offers firms the opportunity for significant and immediate efficiencies – especially in areas such as OTC derivatives.”
The findings from the research are published here.