​Earlier this month, senior European finance professionals gathered in Amsterdam for the Digital Transformation in BFSI event. Our Chief Product Officer, Martin Hargreaves, delivered a keynote presentation on the future of money. We believe that tokenised money – secure and programmable – will allow commercial banks to build new products, create new revenue lines, and simplifying existing processes.

​Quant has been at the forefront of digitalising financial services. Over the last three years, we’ve been involved in several forward-thinking digital finance projects. Martin began his presentation by providing an overview of the main ones.

​LACChain, a USD retail cross-border B2B and remittance payments infrastructure, leveraged distributed ledger technology to increase financial inclusion, improve the sustainability of supply chains, protect intellectual property and reduce fraud.

​Martin then described our involvement in the Bank of England’s retail central bank digital currency experiment, Project Rosalind, that tested how application programming interfaces could facilitate retail payments in CBDCs and support the exploration of innovative CBDC use cases. He outlined the key lessons from this project:

  • ​​Smart contracts lend themselves very well to simulating payment systems
  • ​Smart contracts and DLTs are simpler to consume when they are made accessible to users via APIs
  • ​DLT performance is not yet proven
  • ​Three-party fund locks have potential across a wide range of use cases

​Finally, Martin covered our most recent work on UK Finance’s Regulated Liability Network that explored the future state of payments, including programmability and tokenised deposits, and what UK payments may look like in 2030. The lessons he shared from this project were:

  • An industry overlay can provide the same benefits as tokenising at a lower cost
  • Settlement doesn’t have to be immediate, it can be rapid and safely guaranteed with locks
  • Building new products to create new revenue lines or simplifying existing processes is key to commercialisation
  • Banks may not want to share a ledger; a network of connected ledgers provides many of the same benefits

Martin then moved on to explore the different forms of tokenised money.

Although CBDCs are regarded as the safest form of tokenised money – not least because they’re backed by central banks – Martin believes that tokenised deposits and stablecoins as the most commercially viable. But why would financial institutions consider using these new forms of money? The answer is programmability – functionality that Quant has been at the forefront of developing alongside some of the financial institutions involved in these projects.

For tokenised money to work, Martin concluded, it must be secure, programmable, and be able to unlock liquidity for the digital financial markets of the future.

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“For tokenised money to work, it must be secure, programmable, and be able to unlock liquidity for the digital financial markets of the future.”

Martin Hargreaves
Chief Product Officer - Financial Services
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