EXCLUSIVE: Experts Foresee Blockchain Coexisting With Traditional Assets, Eye Trillions In Growth By 2030

Blockchain technology has the potential to enhance transaction security and efficiency in various sectors, and the capacity to coexist with traditional assets, a panel of financial experts including Rajeev Bamra, head of DeFi and digital assets strategy at Moody’s Corp. MCO, and Patrick Martinez, vice president at Northern Trust Corp. NTRS, said at the Benzinga Future of Digital Assets conference in New York City.

In “The Role of Blockchains in Boosting Transaction Security and Efficiency,” moderated by David Ackerman, head of Compliance at MobileCoin MOBUSD/USD, panelists emphasized the growing market opportunity in the blockchain and digital asset space.

Digital Bonds and Tokenization of Real-World Assets

This opportunity included not only cryptocurrencies but also the tokenization of real-world assets, such as digital bonds.

Bamra revealed how Moody’s role evolved with the increasing prevalence of digital bond issuances, noting the rapid growth in this sector over the past year. Bamra emphasized the additional layers of operational and technological risks that blockchain brings to the financial ecosystem.

The infrastructure for digital assets is evolving rapidly, with traditional financial institutions actively participating in the space.

“We continue to look for new ways, new roles for the bank to play in the future, with a primary focus on digital assets and blockchain,” Martinez said.

Martinez also spoke about the recent developments and future prospects in the cryptocurrency space. He touched on Northern Trust’s partnership with Standard Chartered to establish Zodia, an institutional-grade cryptocurrency custodian. This move, according to Martinez, reflected the belief that the cryptocurrency market, though fluctuating, is far from being “dead.”

The Future of Blockchain in Binance and Economy Integration

The specialist highlighted that the real opportunity at present lies in transforming traditional markets with the integration of blockchain technologies, thereby advancing them into the realm of digital assets.

The speakers converged on the notion that blockchain technology’s true potential lies in its integration with the entire value chain of finance, including areas like digital asset settlement and secondary markets.

“More and more traditional finance institutions actually testing the technology,” Bamra said referring to the rising trend in digital bond issuances over the past months.

However, he stated that for a wider adoption, more actors must come into play.

Bamra also explained the future of blockchain technology lies in bringing the entire value chain onto the blockchain, including stable digital assets for settlement, which is still not present today. Privacy and security considerations are crucial, and technologies such as decentralized digital identity and permissioned blockchains will play a role.

Bamra stressed the importance of integrating blockchain with the real-world economy, calling for sustainable business models and regulatory clarity.

Future Predictions

“Sustainable business models” are the key to success in this industry according to Bamra.

Enhancing integration with the real-world economy by implementing appropriate safeguards and risk mitigation measures would prove beneficial in the long term. This approach would support sustainable business models that benefit all stakeholders, including traditional institutions that are increasingly engaging with decentralized finance.

Martinez expected significant developments in voluntary carbon credit marketplaces, the issuance of securities by large investment banks on blockchains and the emergence of digital asset custodians.

Over the medium term, tokenized money market funds and the digitalization of traditional assets are expected to gain traction, leading to trillions of dollars being represented digitally by 2030.

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Photo: David Ackerman, Rajeev Bamra, Patrick Martinez at Future of Digital Assets 2023, Pratya Jankong for Benzinga