In collaboration with BCG Platinion, the World Economic Forum (WEF) released a study on the use of blockchain for digital assets, emphasizing institutional digital asset adoption.

The paper is more about distributed ledger technology (DLT) applications in conventional asset groups.

These include derivatives, asset-backed securities, fund management, equity, debt, and securities financing.

Overall, the study is upbeat about the future of digital assets, but it does point out several challenges. The lack of an industry-wide vision of the future in most jurisdictions stands out.

“After years of intense speculation, examples of use cases where blockchain is being used to address inefficiencies and problems are beginning to appear across capital markets,” said Matthew Blake, World Economic Forum’s Head of the Future of Financial Services.

“Because the future of blockchain in financial services is still being developed, a nuanced look at the possibilities this technology currently provides is particularly relevant for the financial services industry.”

Several institutional digital asset programmes are either operational or will be short.

According to the World Economic Forum, eliminating redundancies in capital markets and automating low-value-added activities have substantial benefits.

By reducing uncertainty and, in some cases, the need for intermediaries, smart contracts may minimize counterparty risks. There’s also the possibility of lucrative emerging business models.

To achieve these benefits, market-wide standardization is needed, as is a minimally viable environment for putting a solution into production.

Roles will adjust as a result of the changes that DLT will bring to capital markets. It remains to be seen if incumbents or newcomers take on new positions.