On the Future of Securities Settlement

17 Pages Posted: 27 Mar 2020

See all articles by Morten L. Bech

Morten L. Bech

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures

Jenny Hancock

Bank for International Settlements (BIS)

Tara Rice

Bank for International Settlements (BIS)

Amber Wadsworth

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures

Date Written: March 1, 2020

Abstract

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

Bech, Morten L. and Hancock, Jenny and Rice, Tara and Wadsworth, Amber, On the Future of Securities Settlement (March 1, 2020). BIS Quarterly Review, March 2020, Available at SSRN: https://ssrn.com/abstract=3561195

Morten L. Bech (Contact Author)

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland
41612808923 (Phone)

Jenny Hancock

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Tara Rice

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Amber Wadsworth

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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