Digital Assets Summit - Key highlights

Francesca Hopwood Road of the Bank of International Settlements Innovation Hub opened the Summit with a keynote speech on the future of an interconnected, programmable financial system, and the work that central banks globally are doing to drive innovation. 

The Summit featured discussions on the most pressing topics, with industry experts from across financial institutions and the digital assets industry sharing insights on institutional adoption, digital payments, and the digitalisation of financial market infrastructure. 

Regulators and policymakers from the European Commission, Bank of England, House of Lords, and Securities Commission of the Bahamas joined to discuss the key developments in legislation and regulatory frameworks. 

Key takeaways include:

• The past year has shown that institutional adoption is steadily increasingly, and we are now seeing innovations in the wholesale space as well as in retail services.
• Central banks are taking a positive attitude towards experimenting with tokenization and other new technologies. 
• Interoperability is needed to fully reap the benefits of tokenization and programmable platforms; 
• The transition from legacy systems to those based on new platforms may require a “parallel tracks” approach in the immediate term, where old and new infrastructures co-exist; 
• The future of digital money and payments is likely to include a mix of different instruments, from digital forms of private money such as stablecoins and tokenized deposits to central bank digital currencies; 
• Global standards are welcome, although industry (i) recognizes the practical challenges of developing and implementing global standards, and (ii) policy decisions (such as whether or not to issue a central bank digital currency) needs to be tailored to circumstances of the relevant jurisdictions; 
• Those that sit outside of traditional finance and institutional systems may face fewer constraints to innovation. That said, there is an obvious and justifiable need for regulators to preserve financial stability and integrity of the markets. The questions remain in terms of how regulation can strike the right balance, how the role of intermediaries will evolve, as well as how traditional finance and decentralized finance may interact in the future.

Sharon Lewis, Sector Head of Financial Institutions and Co-Head of Digital Assets and Blockchain, said, “The adoption of digital assets across financial services is clearly continuing to rise. Where FinTech has transformed much of the retail finance space over the past decade, tokenization and digital assets are now transforming much of our activities across the wholesale finance. The Summit is a brilliant time to bring the industry together to discuss the challenges they are facing, as well as the great deal of opportunities.” 

For more information about the event, visit Hogan Lovells Digital Asset Summit 2024.