“ Wave 3 (2020-30) The third wave involves the adoption of blockchain technology in major pieces of capital markets infrastructure. Once assets are held as tokens on the blockchain, the clearing and settlement of trades across multiple asset classes can move to distributed ledger-based infrastructure, as opposed to the hybrid or dual systems that we project through the first two waves. This will drastically cut processing cycles and unlock liquidity. Other developments may impact asset managers even more fundamentally. Blockchain-based infrastructure could enable new investment products and platforms, such as new product wrappers that allow investment in shares of ETF-like baskets of underlying assets and deploy smart contracts to reduce administrative and trading-related overhead."

“ Central Banks around the world are exploring DLT-based digital currencies. In the UK, Canada, Russia, Australia, Sweden, China, central banks are assessing risks and benefits of issuing fiat currency backed digital currency on the blockchain, and investigating their potential effects on the economy and on financial stability. Any central bank-issued digital currency would likely look substantially different from Bitcoin's open, decentralized, peer-to-peer model and it might not need a DLT approach."

“ Bockchain technologies could reduce banks' infrastructure costs attributable to cross-border payments, securities trading and regulatory compliance by between $15-20 billion per annum by 2022."

“ DLT could be applied to various processes in cross-border payments. With its global payments innovation initiative, SWIFT is aiming at using DLT to improve the speed, transparency, and end-to-end tracking of cross-border payments, including reconciliation with invoices. Correspondent banks could also participate in a shared permissioned DLT platform to automate the tracking of payments, and to optimize liquidity and risk management. in such a scenario, regulators will need to be satisfied that the underlying technologies would be sufficiently robust so as not to increase operational risk."

“ DLT is viewed by many as having the potential to improve market efficiency. Efficiency is a broad concept that encompasses the arrangement's design, functionality and resource needs. Efficiency, in this context, is gauged by the speed and cost of the entire asset transfer cycle and how well the arrangement is meeting the needs of the markets it serves. In considering both speed and cost implications, reconciliation, credit and liquidity management and automation will be important features."

“ A recent report from Goldman Sachs estimates that in banking, consistent use of blockchain in KYC/AML checks alone could save $2.5bn of the estimated $10bn global processing costs in the sector."

“ As it stands, cash is the only means by which the public can hold central bank money. If someone wishes to digitise that holding, he/she has to convert the central bank liability into a commercial bank liability by depositing the cash in a bank. A CBCC would allow consumers to hold central bank liabilities in digital form."