On the Future of Securities Settlement
17 Pages Posted: 27 Mar 2020
Date Written: March 1, 2020
Innovative technologies, such as distributed ledgers, allow securities to be issued or represented in a new form known as digital tokens. Such "tokenisation" of securities will alter post-trade clearing and settlement, and could improve efficiency in some dimensions. But the fundamental trade-offs involving credit risk and liquidity remain in a tokenised world. To succeed, tokens will need to interoperate with account-based systems, at least in the interim.
JEL Classification: G1, G15, G23
Suggested Citation: Suggested Citation