Global financial institutions believe there are far greater uses of Distributed Ledger Technology (DLT) than trading crypto currencies, research from SIX has revealed.

A global Future of Finance Study of c-level executives across 300 financial institutions has found that a mere 20% of firms, including investment banks and asset managers, believe the trading of crypto currencies is a meaningful use of DLT. Instead, over half (56.23%) of respondents think DLT would either be better used to drive new revenues, or finding cost savings from existing business.

Just over a third (32.92) of asset managers said that creating greater efficiencies from existing business is the best use of the blockchain right now. In contrast, over a third of investment banks (35.71%) stated that DLT is best used for currency payment and cash settlement services. The findings come as the FTX post mortem continues, with regulators and central banks reviewing how investors can achieve the same levels of protection and market resilience that they have in traditional markets.

“FTX operated from a jurisdiction [the Bahamas] which lacked effective and transparent regulation governing the crypto trading services that it was offering customers,” said David Newns, Head SIX Digital Exchange. “However the trading of crypto, as our research shows, is not ultimately where the central benefits of this technology lie. There are numerous ways digital assets could be deployed in the traditional financial system to create more resilient markets. Using digital tokens for the issuance, trading and settlement of equities and bonds, for instance, could remove significant delays, costs and risks across the market.”

“Although the value of cryptocurrencies is very much up for debate, the potential for the underlying technology is undeniable,” added Javier Hernani, Head of Securities Services at SIX. “Across the spectrum of post-trade processes, DLT is well-placed to bring significant benefits, from greater efficiency to increased transparency. In a few years we expect this number to be higher, as market participants seek out new technologies to answer the many questions raised by the move to shorter and safer settlement practices.”

Source: SIX