As DLT has the potential to represent multiple forms of digital value, we might go further and envision the creation of networks that tokenize regulated liabilities and regulated assets on the same chain. Such a network would be significantly different from today’s siloed financial architecture — a regulated internet of value. This system would embody tokenized currencies, bonds, equities, trade instruments and other regulated financial instruments in an ‘always on’, programmable and global network.
A DLT network can represent the liabilities of different institutions without changing the underlying legal instruments. The independence of legal instruments and technological representation can be understood in the following way. In pre-digital days, liabilities were stored in paper ledgers. When record keeping moved to databases the legal instrument did not change. Nor is there a need for legal instruments change if regulated liabilities are transitioned to a DLT platform.
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