This article was first published in the 23rd edition of the Fact Book on 24 June 2025.
Imagine it is Saturday afternoon in the not-too-distant future; after noticing a high cash balance in your bank account, you decide to buy- via your mobile phone a couple of hundred euros worth of shares - of a mutual fund investing in Saudi real estate. The transaction is instantaneous. The fund units are now held in your mobile wallet. Wait, what? Is this a scene from the latest sci-fi blockbuster on streaming? In reality, no; yet many of the elements required to enable the scenario above are already in motion, and their future convergence will make the described use-case a reality.
Let’s unpack this example. The consumer is investing on a Saturday, the asset in question is a private asset (real estate) yet it is available to retail, the investment amount is tiny and the transaction only takes a few seconds. This is precisely what a DLT-enabled (Distributed Ledger Technology) future holds; 24/7 trading, fractionalisation (fractional ownership of alternative assets), disintermediated transactions (bypassing clearing houses and custodians) and finally the ability to hold and settle transactions via a digital currency.
As any expert on DLT/tokenisation knows, for such DLT-enabled offerings to reach the retail investor, a few key milestones need to be cleared first. Interoperability between DLT platforms is one, the availability of tokenised assets at scale is another. Last, cash-on-chain is critical for closing the loop and enabling secure and instantaneous payments. In Europe, we are progressing – albeit piecemeal - toward these milestones, through a combination of enabling regulation and enterprising and visionary firms. As far as regulatory certainty and the role of the authorities, we can think of regulations such as MiCA (for crypto-assets and crypto-currencies), the DLT Pilot Regime (for DLT-enabled trading and settlement) and the pioneering work of the European Central Bank on a digital Euro.
The US is similarly positioned, although arguably in a more centralised and visible form with a White House Crypto-asset working group, a dedicated SEC task force and key legislations under review in Congress. Beyond the EU and the US, other markets are competing for the top spot as regional DLT hubs, with highly developed DLT ecosystems: Switzerland, Singapore and Hong Kong, to name the most prominent. The good news is that these initiatives are not mutually exclusive. Most participants in the DLT-space would warmly welcome a global push for interoperability and standard-setting. Harmonised rules - or at the very least a global set of principles, combined with common standards (technology architecture design, smart contract standards and governance) – would provide a major boost to the much-desired network effects.
This means the only real risk is the risk of doing nothing at all. When your target market, the end investor, pulls out their mobile device on a Saturday afternoon and decides to invest a small amount of cash, your firm wants to be the one that has built and invested to take advantage of this very scenario.
Notes to Editors
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