This document discusses digital assets and tokenization on blockchain networks. It provides an overview of digital assets, their value chain, and how they can enable new capital market opportunities. R3 is working on tools like the Corda Token SDK and Cash Issuer CorDapp to improve the experience of creating, issuing, and managing digital assets on Corda. The document also mentions R3's Digital Asset Working Group and efforts to integrate the Corda Settler with SWIFT's gpi payments link.

1. © 2019 NTT DATA Corporation
23 September 2019
David Nicol
R3
Digital Assets and the Future of
Capital Markets

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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. © 2019 NTT DATA Corporation 33 Source: Technological Revolutions and Financial Capital by Carlota Perez
A brief history of tokenization

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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.

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As blockchain technology is
deployed in finance, we get:
New tools for capital formation
Improved accessibility
Better asset management

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Capital Markets Ecosystem Map
6
Each service is provided by a different party

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Digital Asset Value Chain
7
Issuer Investor
Issuance
Registration
Exchange
Settlement
Management

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What is R3 doing?

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Corda supports a vibrant digital asset ecosystem
Digital Asset Issuers Market Infrastructure
Providers
Digital Asset Investors
Buy-Side
Corda Token SDK
Products & Services
9

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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.

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Corda Settler
1
Corda Settler Transaction
Obligation
‘primed’
Deferred
settlement
Instant
settlement
Transaction Flow

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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

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Market-Facing Activity

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Primary
Market
Services
New Digital
Tokens
Tokenizatio
n of Existing
Assets
Non-
bankable
Assets

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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.

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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

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Thank you!
Digital.assets@r3.com