A smart token model for native digital assets

Ian Hunt
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Ian Hunt: Buy-Side Industry Consultant and Adviser

Journal of Financial Transformation, 2023, vol. 58, 54-69

Abstract: Digitalization is not about doing what we do now, but with slightly better technology. It is an opportunity to do something very different, which is much simpler, much cheaper, and much better. A number of factors are preventing us from taking, or even perceiving, that opportunity. We are held back by the popular perception that digital assets are questionable and shady, and by regulatory uncertainty over the treatment of digital assets, as well as by our own unwillingness to think beyond the current financial ecosystem: we find it hard to accommodate the degree of change that would enable us to maximize the benefits of digitalization. This paper explains the radical potential of native digital assets to create a single, simple issuance and transaction model across all financial assets. This would deliver a dramatic improvement in client outcomes and in the flexibility of investment products, along with an equally dramatic reduction in cost and risk in the way that we deliver those products. It would enable regulation to be far simpler, but more effective. It would allow us to roll back the surging tide of complexity in the infrastructure, management, and regulation of finance. This model will be adopted soon in a forward-thinking jurisdiction. All other markets, ploughing on with our current overweight, over-complex, and heavily regulated financial ecosystem, will become uncompetitive: they will have no choice but to follow.

Keywords: Digital Assets; Smart Tokens; Digitalization (search for similar items in EconPapers)
JEL-codes: G23 O16 O31 O32 O33 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:3469

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