On 15 April, Innovate Finance’s Global Summit returned to the City of London to celebrate its 10th anniversary at the historic Guildhall. The event brought together financial leaders and experts from across the industry to discuss the fintech trends set to shape the decade to come.
Taking to the stage for a panel discussion entitled ‘a token for your thoughts’, our Founder and CEO, Gilbert Verdian, was joined by Founder and CEO of Orora, Victoria Thompson, and Founder and CEO of Ctrl.Alt, Matt Ong, to share their insights on why programmable digital currency holds the promise of a revolution in financial markets – if the UK’s banks and other financial institutions are ready to commit to it.
Tangible benefits
Panel moderator, Mark Simpson, Partner at Baker McKenzie, began by asking for the benefits of tokenisation, to which Gilbert said, “as we’re making our assets and instruments digital, we’re getting the benefits of DLT. This includes custody, security and accessibility to all the keys you manage. It also provides programmability, which means you’re able to code logic into the asset itself for the first time. In turn, this means you can code workflows into money and in doing so, you can automate a range of complex processes that took many years and resources to do previously.”
Ong added: “The problem statement that we addressed with tokenisation is giving more people access to these investments whether that’s on the institutional scale, or on the retail scale. When it comes to digital currencies, tokenisation is a phased process. And to get to that kind of golden ground that people talk about with full benefits of tokenisation, you need a digital currency to go alongside for tokenising real-world assets.”
It was left to Thompson to emphasise that, no matter how clever the technology behind it, it’s the benefit it creates for the user that really matters: “Consumers don’t care about tokens. They care about money and being able to access products and services. What we’re talking about with tokenisation is the movement of data – data that can be shared easily.” She added, “we are on the precipice of a revolution, and it’s important for emerging markets because it can transform access and increase the growth of the market by making it cheaper, faster, quicker.”
The need for collaborative commitment
Simpson then shifted the conversation to ask what some of the barriers to adoption are. Gilbert explained the importance of being on the same page as the regulators, the need for standardisation and why implementing the technology correctly is the key to success: “We’re seeing banks working collaboratively to proactively explore the possibilities of DLT before regulation is introduced. This is what will allow them to create this new infrastructure.”
Ong agreed and highlighted the importance of keeping up the momentum. “Regulators should continue their work with individual players innovating in this space. While some regulation has changed to support tokenisation models, there’s work to be done,” he said.
Quipping that finance is supposed to be where the money is, Thompson noted one of the key barriers to adoption was the banks’ reluctance to deploy capital: “We need more companies like Quant that are thinking about infrastructure, that’s where we need the investment to turbo charge this.”
A call to action
All of the speakers believe tokenisation presents a huge opportunity. Gilbert concluded with a call to action for the industry: “The UK is at the forefront of a revolution of finance, if we want to create tokenised economies, this should be our mandate: we are transforming from electronic finance to digital finance and the UK can be at the epicentre of that. I say, let’s do it, let’s make it happen!”
Thompson agreed, adding, “we have all the ingredients for the most amazing opportunity right now. Let’s build on our already amazing legal and regulatory framework and use this to take us forward.”
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