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Digital Assets and the Future of Capital Markets


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David Nicol presents on Digital assets at Sibos 2019.

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Digital Assets and the Future of Capital Markets

  1. 1. © 2019 NTT DATA Corporation 23 September 2019 David Nicol R3 Digital Assets and the Future of Capital Markets
  2. 2. © 2019 NTT DATA Corporation 2 Digital Assets are agreements or data points, represented on a database • Blockchain is the latest system to coordinate what a database shows. • A native asset uses the blockchain database as the system of record. • An asset-backed token is a pointer to the system of record elsewhere.
  3. 3. © 2019 NTT DATA Corporation 33 Source: Technological Revolutions and Financial Capital by Carlota Perez A brief history of tokenization
  4. 4. © 2019 NTT DATA Corporation 4 Only for capital markets? 4 New Capital Markets is the top use case, creating capital markets opportunities from other industries is the next use case, … and digital assets also add value outside of capital markets as a cross-cutting enabler.
  5. 5. © 2019 NTT DATA Corporation 55 As blockchain technology is deployed in finance, we get: New tools for capital formation Improved accessibility Better asset management
  6. 6. © 2019 NTT DATA Corporation 6 Capital Markets Ecosystem Map 6 Each service is provided by a different party
  7. 7. © 2019 NTT DATA Corporation 7 Digital Asset Value Chain 7 Issuer Investor Issuance Registration Exchange Settlement Management
  8. 8. © 2019 NTT DATA Corporation 8 What is R3 doing?
  9. 9. © 2019 NTT DATA Corporation 9 Corda supports a vibrant digital asset ecosystem Digital Asset Issuers Market Infrastructure Providers Digital Asset Investors Buy-Side Corda Token SDK Products & Services 9
  10. 10. © 2019 NTT DATA Corporation 10 The Token SDK improves the developer experience in creation, issuance, movement and redemption of tokens Why now? Why should developers care? Why Corda? • Bring new sources of capital into different markets • Automate asset management • To improve liquidity and access for new capital markets products • A common language: Standard token types • A standard interface: A developer-friendly experience • Corda foundation: Use states, contracts, and flows to create applications and tools that work for business • Privacy: Peer-to-peer transaction level architecture • Scalability: Nodes only communicate when they are party to a transaction • Finality: Corda transactions are final and irrevocable once confirmed.
  11. 11. © 2019 NTT DATA Corporation 11 Corda Settler 1 Corda Settler Transaction Obligation ‘primed’ Deferred settlement Instant settlement Transaction Flow
  12. 12. © 2019 NTT DATA Corporation 12 The Cash Issuer is an open source CorDapp template that creates cash tokens (fiat-backed stablecoins) for Corda ecosystems, based on money in a bank account. Bank accounts Party A: $50k Party B: $60k Issuer: $0 Party A Party B Issuer Bank balance transfer… leads to… token creation on Corda Party A Party B DvP Asset vs Payment
  13. 13. © 2019 NTT DATA Corporation 13 Market-Facing Activity
  14. 14. © 2019 NTT DATA Corporation 14 Primary Market Services New Digital Tokens Tokenizatio n of Existing Assets Non- bankable Assets
  15. 15. © 2019 NTT DATA Corporation 15 Digital Asset Working Group • Initial closed-door ‘DAWG’ concluded in June with DAWG report. 53 firms and 100+ participants. • Ongoing ‘DAWG’ continues as quarterly update on digital asset space – open to all clients, partners, & prospects.
  16. 16. © 2019 NTT DATA Corporation 16 Corda Settler is integrated with SWIFT gpi link • Open source CorDapp that allows two parties on Corda to create an obligation for how and when they will settle a Corda transaction. • Integration with SWIFT gpi in PoC – delays due to bank readiness. • Other integrations planned
  17. 17. © 2019 NTT DATA Corporation 17 Thank you!