Distributed ledger

Yeah, I hear that a lot of times.

People talk about distributed ledger and blockchain and crypto and Bitcoin and all the terminology does get kind of confusing.

I think to your specific question, DLT technology, that's the infrastructure.

That's that distributed ledger that is established on a blockchain and it really creates that, I'd say the blockchain-based ledger containing the shared record of all the digital asset and its activity.

Right.

Cryptocurrency is one type of digital asset that's stored on a blockchain ledger or stored in DLT.

And cryptocurrency represents money.

Examples would be Bitcoin, which I think started in the late 2000s, you know, around the time of you really took off a lot during the whole 2008 depression.

It's a development out of the end of the first financial crisis in 2008.

And then B, also, I mean, Luxembourg's been a fairly early mover in terms of actually looking at how we can bring examples of tokenized or DLT financial services inside the kind of regulatory framework.

So the example that always springs to mind for me is that, you know, our regulator was already looking at, you know, without the existence of a regulatory framework for crypto, how can we regulate crypto exchanges or what elements of the business need regulation? With the result that in 2016, you know, it's a long time pre-MICA, we were already providing licenses to institutions like Bitstamp and then slightly later Bitflyer.

for the to regulate their their fiat activity and then provide some investor protection and then obviously you know crypto is one element of dlt but it's a very you know it's one only one element of it um one of the one of the things that we realized also quite early on was the broader impact it has on financial services particularly securities generally And so you can see that through the development of the local Luxembourg blockchain laws, which start back in 2019 and now have four iterations, basically allowing for the use of DLT across all sorts of different elements of securities.

And then the uptake that we've seen on the industry side in that both in terms of fund tokenization, you know, some examples of TA on blockchain and then also some bond tokenization as well.

So, I mean, I think it is important to kind of remember where we come from and the kind of expertise that we have developed, even if I am tooting my own horn, tooting Luxembourg's horn a little bit there.

There's very little actual trading that's happening on those tokenized instruments.

And there could be reasons for that.

Whether that means going from what used to be batch-based rails or overnight processing rails to real-time processing systems in most of the big countries in the world.

And then now even other rails like crypto-based rails, DLT-based rails.

I feel these have been some very interesting developments that have really come together to make our business even stronger and bigger than it used to be.

I agree, Umar.

And each one of those hops need to perform their same, you know, AML and anti-money laundering and screening processes so that they all keep their hands clean.

In the case of stablecoins, based on DLT, it's peer-to-peer.

So you've got a single hop.

So that means you no longer need to worry about all of the intermediary hops and repeating all of those regulatory or compliance checks at each one of those hops.

Our link with Gibraltar started in 2017.

I was in the Financial Action Task Force, um, talking to a few group of regulators around the world who were very skeptical about crypto, and, uh, and Gib at that time was writing the DLT framework.

And it was very early, and it was interesting to see a jurisdiction like Gibraltar taking a risk at that time of something that seemed quite uncertain.

Today, you know, crypto is playing a very, very important role.

Uh, I think Gibraltar has had a longstanding history of being a jurisdiction that has embraced innovation and has been a fast mover when it's seen market opportunities.

Um, I've been calling Gibraltar my home, uh, happily for the last eight years.

Uh, when I came to the jurisdiction, it was in the dawn of the new DLT regime, distributed ledger technologies, um, blockchain regulation, and Gibraltar was one of the first movers on that front as well, and we haven't stopped since then.

I've been incredibly privileged and, and honored to have been working with Minister Feetham on a lot of his, um, projects in the jurisdictions and, um, the focus on bringing in new, um, markets and new opportunities.

Quite a remarkable amount of progress, to be honest.

So in my role within Gantt, which was an organization initially established to focus on the DLT and crypto industry in 2018, as our regulatory framework was introduced.

But as the name suggests, we are an association to represent new technologies in general.

And as everyone is aware, artificial intelligence has made sci-fi-like leaps and bounds.

And as we've seen with the tokenisation bill and other regulations that are in the pipeline, Gibraltar can move quickly to be ahead of the curve.

And it's benefited us historically.

As I mentioned earlier, in 2018, we were the first jurisdiction globally to have a full regulatory framework for DLT firms.

The world has evolved.

TDS, that's weird.

So Royal Bank of Canada, RBC, Toronto Dominion Bank, TD, Bank of Montreal, BMO, Bank of Nova Scotia, Scotia Bank, Canadian Imperial Bank of Commerce, and National Bank of Canada are all working together on this DLT.

Essentially, that's the six largest banks in Canada, pretty much.

Yes, but look at BMO.

Europe, there's a, I want you to look up a word, it's Pontes, P-O-N-T-E-S. It's the Eurosystems Distributed Ledger Technology.

So over there we had TDS.

In Europe we have the DLT, and basically what it is, it's a solution that connects market platforms with target services to settle DLT-based wholesale transactions using central bank money.

Well, guess what that is? That is the central bank digital currency.

[on-hold music] Capital Market Insights from ICMA.

I'm Andy Hill, co-head of Market Practice and Regulatory Policy at ICMA, and I would like to provide a brief overview of the article I co-authored with my colleague, Francisco Parente, for the latest edition of the quarterly report that looks at developments in DLT repo and collateral.

When people talk about distributed ledger technology, tokenization, and digital assets, the conversation often focuses on bond issuance.

But one of the most promising applications may actually lie elsewhere, in collateral management and repo markets.

In fact, unlike many other areas of digital finance, DLT based repo is no longer just a concept.

Commercial solutions are already operating in the market today, while central banks, market infrastructures, regulators, and industry participants around the world are actively building the foundations for broader adoption.

So what makes repo and collateral such compelling use cases? The answer lies in the role they play in the financial system.

Yet the infrastructure supporting these activities remains highly fragmented.