Digital sandboxes are all the rage at the moment in the realms of finance, it seems, with the Depository Trust and Clearing Corporation (DTCC) the latest to take its own spin on the concept.
Interest in digital sandboxes has grown in tandem with cross-industry interest in digital assets and digital technology in finance. Interest in sandboxes has come from both businesses and regulators/policymakers.
DTCC has christened its sandbox the ‘DTCC Digital Launchpad’, and the firm has set itself the goal of bringing together different financial market participants and find a way for a scalable adoption of digital assets.
The American financial market infrastructure company hopes that market participants, technology providers and other stakeholders will develop digital asset pilots and ultimately capitalise on projected $16trn in tokenized securities forecasted to be on digital rails by 2030.
Frank La Salla, DTCC President, CEO and Director, said: “DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology.
“As an industry-owned and governed infrastructure for the world’s largest capital markets, DTCC is uniquely suited to drive industry collaboration under the banner of a larger goal: building a digital asset ecosystem that’s as safe and sound as the one we have for traditional securities today.”
As noted above, digital securities sandboxes have become a popular means for both regulators and private enterprises to test digital assets and tokenisation. DTCC’s sandbox launch comes just a few weeks after Mastercard pursued a similar endeavour.
Meanwhile in the UK, a government-launched digital securities sandbox has been active since September, administered by the Bank of England and the Financial Conduct Authority (FCA). In a separate development, the UK Finance trade body aims to launch a ‘Regulated Liability Network’, which will function in a similar manner to a digital sandbox.
These sandboxes will test various types of digital and tokenised assets, but some key talking points seem to appear in most iterations. In DTCC’s case, the company is interested in Distributed Ledger Technology (DLT), and looking at ways to improve data, liquidity, and infrastructure, interoperability and data harmonisation.
Nadine Chakar, Global Head of DTCC Digital Assets, said: “We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach.
“The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”
