DTCC Urges Financial Institutions to Collaborate in Forming A DLT Regulatory Framework

U.S Depository Trust & Clearing Corporation (DTCC) published a white paper on Feb,12 calling for the establishment of a proper regulatory framework on blockchain technology. The leading American financial markets clearing and settlement company noted that this would help avoid the risks associated with Digital Ledger adoption in future.

This white paper dubbed ‘Security of DLT Networks’ highlights the opportunities and looming risks if financial industry stakeholders do not step up to oversee blockchain implementation. DTCC’s Chief Security Officer, Stephen Scharf, further emphasized on the importance of tech policy upgrades;

“DLT offers great potential, but as with any new technology, it also comes with certain risks. Traditional security measures may not be adequate, so it is critically important that this topic is top of mind for any DLT implementation.”

DTCC’s Proposed Strategy on Blockchain Implementation Oversight

According to the whitepaper, financial market players are better off collaborating to form standardized guidelines on DLT adoption. It continues to read that a coordinated approach would help address the security associated risks in detail. This will in turn assist firms operating and looking to enter the blockchain market to play by the book and grow within a regulated framework.

DLT will notably improve how data is protected, verified and processed. As a result, DTCC suggests that a more tech specific framework would be effective in integrating the DLT networks within IT legalities across the world. An industry consortium to form fundamental operational guidelines was also identified as a long-term solution to the existing legal gaps in the DTCC whitepaper.

There have been previous efforts to form a baseline regulatory framework around blockchain tech but only a few jurisdictions have achieved much. DTCC plans to capitalize on its muscle within the derivatives market to lobby as many financial players and develop a standard for DLT frameworks. Mr. Schaff noted on the importance of a global framework for all industry participants;

“As is common in IT security communities, frameworks must be widely available, generally agreed upon, and commonly adopted.” he added “As best practices mature, they can be adopted into a formal framework and used for financial industry participants and regulators alike.”

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Edwin Munyui
Edwin Munyui
Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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