Foreword
Global financial markets are currently at an inflection point. Capital markets are moving faster towards an always-on operating model, and at the same time, distributed ledger technologies (DLT), including blockchain technology, are becoming more mainstream. These megatrends are reshaping global financial markets by increasing liquidity, transparency and mobility.
Core to this transformation are the United States Treasury (UST) and cash markets which facilitate the flow of capital, serve as essential collateral and power the payments ecosystem. Traditional infrastructure and legacy operating systems — including batch processing, time zone differences and after-hours market closures — pose settlement efficiency challenges today. No recent advancement has made this clearer than blockchain technology. This transformation isn’t about blockchain technology immediately replacing traditional systems, it’s about the two working in concert to unlock new possibilities. Over time, this coexistence will evolve through phases, ultimately shaping a future that will be fundamentally transformed.
Imagine a future where assets move seamlessly across borders, powered by interoperability that allows programmable money and new currencies to facilitate global payments and serve as faster-settling collateral. In this model, over time markets could operate 24/7, with certainty, and enable use cases such as global continuous UST trading and settlement.
This paper explores the four drivers transforming the future of financial markets:
#1
#2
#3
#4
Increased adoption of digital market infrastructure and blockchain technology
Growth of digital cash equivalents and tokenization
Power of interoperability and the network effect
Regulation as a catalyst for growth
#1
Increased adoption of digital market infrastructure and blockchain technology
#2
Growth of digital cash equivalents and tokenization
#3
Power of interoperability and the network effect
#4
Regulation as a catalyst for growth
FULL REPORT
The Digital Revolution:
Transforming Financial Market Infrastructure
Global financial markets are experiencing sweeping change. Capital markets are moving faster and blockchain technology and digital asset adoption are becoming more mainstream. With our central position and scale in capital markets we are particularly well positioned to build the future financial infrastructure in partnership with our clients.
– Carolyn Weinberg, Chief Product and Innovation Officer
Whether through DLT or next-generation payment systems, the true transformation lies in how networks interconnect. BNY is uniquely positioned to connect the traditional and digital financial ecosystems and enable clients to accelerate their growth and run their businesses faster and more efficiently.
For over two centuries, BNY has been at the forefront of financial market evolution and powering global capital flows — connecting investors, issuers and markets through trusted infrastructure that enables trillions of dollars to move safely every day. Today we are driving the new standard by incorporating the latest technology and innovations.
EXPLORE THE
DIGITAL REVOLUTION
Discover what is transforming the future of financial markets