In a recent development, the Depository Trust & Clearing Corporation (DTCC) has entered into an agreement to acquire the blockchain startup Securrency Inc. The deal was finalized at an approximate value of $50 million, as reported by Bloomberg.
This acquisition marks a strategic move for DTCC, reflecting its commitment to advancing within the realm of blockchain technology. Specifically, DTCC aims to bolster its capabilities in the post-trade processing of tokenized digital assets, among other services.
Anticipated to finalize in the coming weeks, the acquisition will see 100 Securrency employees integrating into the DTCC workforce under the new arrangement.
DTCC’s CEO, Frank La Salla, has taken a strategic leap into blockchain technology. During a discussion with Bloomberg, he offered insights into how Securrency’s technology could empower DTCC.
Specifically, it has the capacity to facilitate the oversight of security issuance and trading, particularly in the case of exchange-traded funds (ETFs), within the realm of blockchain networks. La Salla underscored DTCC’s unwavering commitment as a vital infrastructure provider to the industry, expressing its dedication to embracing cutting-edge technologies.
This acquisition marks one of DTCC’s most significant forays into the realm of blockchain and distributed ledger technology. Advocates of this technology believe it has the potential to streamline intricate post-trade processes, potentially revolutionizing financial markets.
The Journey of Blockchain Startup Securrency, Leadership Transition, and Industry Maturation
Based on an estimate by Citigroup Inc. analysts in March 2023, up to $5 trillion worth of traditional financial assets may transition to blockchain networks, with representation as tokens, by the year 2030.
Following the acquisition, Securrency will undergo a transformation, rebranding as DTCC Digital Assets. Nadine Chakar, the current CEO of Securrency, will continue to lead the organization and will also become a part of DTCC’s management committee.
Reflecting on the Maturation of Blockchain in Finance DTCC’s CEO, Frank La Salla, shared his observations on the evolving landscape of distributed ledger technology within the financial sector. He noted, “I have noticed that over the past year, conversations surrounding the applications of distributed ledger technology have become more grounded and pragmatic.”
This transformation reflects the gradual maturity of blockchain technology in the financial sector. In recent years, prominent banks and financial institutions have embarked on the development of their own exclusive blockchain platforms.
Their aim has been to perform post-trade functions akin to what Securrency’s technology facilitates. However, this path has raised concerns. These concerns revolve around the duplication of efforts and the mounting complexity of various blockchain systems. Importantly, these systems frequently lack compatibility.
Blockchain’s Collaborative Revolution: Streamlining Finance Through Asset Tokenization
La Salla emphasized that the industry is transitioning from an experimental phase to a collaborative one, recognizing the need for cooperation in streamlining operations.
Asset tokenization is all about making trading and post-trade settlement procedures more straightforward. It also has the added benefit of boosting market accessibility and liquidity.
This method entails the representation of tangible assets from the real world, like corporate shares, as digital tokens on a blockchain. For instance, consider Securrency’s technology. It could pave the way for the creation of ETFs as tokenized securities.
These assets would be traded and settled through a distributed ledger, departing from the conventional market infrastructure. This shift carries the potential to simplify multiple intricate elements within today’s post-trade systems. These include transaction reconciliation and asset clearance.
DTCC is actively positioning itself to play a significant role in the continuous journey of asset tokenization. This is especially true as blockchain technology gains wider acceptance within mainstream finance.
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