Various major technology players and institutions have teamed up to launch a not-for-profit group that will create a standards framework for token-enabled ecosystems.
Members of the InterWork Alliance include the DTCC, Calastone, Nasdaq, R3, SIX Digital Exchange and UBS, alongside the likes of Microsoft, IBM and Accenture, and other digital asset or blockchain specialists.
InterWork Alliance will collaborate on setting standards for building distributed applications, including frameworks on token definitions and contracts in non-technical terms, which developers can then code on any platform.
“A critical next step in the evolution of these exciting new assets and their associated marketplaces will be the formation of universally agreed standards and practices to ensure that players in the ecosystem can connect in a secure and efficient manner,” Tim Grant, chief executive of SIX Digital Exchange, commented.
InterWork Alliance president, Ron Resnick, added that companies are looking to create token-based business models without having a platform technology in mind. Although for this approach to work, standards must be established around defining what a token is and how it operates contractually.
“By bringing great technology and innovative business leaders together to deliver the market-driven specifications needed to facilitate interworking, the Alliance can deliver a proven, standard approach that is required to bring consumer trust into this space.”
Tokenisation is already underway in some sectors of the financial services industry, with several milestones seen in areas such as collateral management, securities settlement, securities listing, and private markets.
At a recent digital asset conference, BNY Mellon custody product manager, Kara Kennedy, said that the bank is exploring tokenisation with its fund management clients with proof of concepts, and urged the industry to consider opportunities around tokenisation more seriously.
“To negate looking forward to how this technology can transform this market would be bad for our business,” Kennedy said. “We have to be aware of these changes and how they can affect our market, because the opportunity for this technology is significant, particularly in terms of the potential efficiencies it can bring.”
Meanwhile, DTCC has launched a new project codenamed ‘Project Whitney’ to explore the potential for asset tokenisation and digital infrastructure to support private market securities.