21 Shares co-founder Ofelia Snyder stated that the monetization of assets would indeed improve settlement efficiency and transfer of assets, but the existing infrastructure on Wall Street is not yet ready for adoption by large-scale institutions. In her view, the current real bottleneck was not the function of the chain, but the ability to access traditional financial systems.
It's not the deal.
In an interview with CoinDesk, Snyder stated that the sector chain industry had made progress in dealings and chain transfers, but that it was only part of the process. For banks, issuers and regulators, there is a large number of back-office processes to be processed between the completion of the transaction and the final settlement.
These processes include bookkeeping, compliance review, control reporting and internal control over client assets. She noted that when the market discussed the monetization, it tended to focus more on chain efficiency, while ignoring the link between the real use of the technology by those decision-makers.
Existing systems not yet fit
She indicated that many financial institutions relied on third-party software providers for core business, but that most of those systems were not yet ready for primary block chain transactions. If tokenized assets enter existing business processes, the agency not only adjusts the software but also redesigns the wind control framework.
One of the practical problems is that if monetized assets support round-the-clock transactions, the existing risk management approach of traditional institutions also needs to change. Such modifications will not be completed soon for agencies that have long relied on the fixed-trading time and book registry system.
Size is the real test.
According to Snyder, the monetization project could operate successfully in small-scale pilots, but the challenges would be significantly magnified once the actual volume of access to United States capital markets was reached. To be honest, according to the scale of traditional financial flows, $1 billion is not a big one.
The transfer of large and bearer assets on behalf of clients requires stricter supervision and control than the existing book-keeping system. She believed that the industry would then move into the post-pilot phase, with the focus no longer being on demonstrating the availability of technology but rather on testing the access of the infrastructure to key business links in large financial institutions.
She expected that if institutions continued to move forward in the coming years, the market would see more substantive implementation projects. However, the final progress will depend on the willingness of financial institutions to move the system forward with more speed.