Publications | Blog | Podcasts | Events | Your contacts
Distributed ledger technology (DLT) and digital assets based on it have undergone a remarkable evolution: Previously reviled as the basis for opaque cryptocurrencies with limited uses, DLT and its best-known form, the blockchain, are now on every CEO agenda in the financial industry.
The application possibilities and influence potential of DLT are already being compared to the evolution of the internet. In the financial world in particular, there are multiple options for using the technology. In the following overview, we illustrate the steep development since the first cryptocurrency, Bitcoin, was founded in 2009 on the technical basis of the blockchain.
Distributed ledger technology makes it possible to store and manage data in a secure, transparent and decentralised way. In contrast to centralised databases, where all data is stored in a single location, DLT enables the distribution of data to many different nodes in the network. Even if many traditional market participants have only approached the topic cautiously so far - the dynamic further development is foreseeable and holds enormous opportunities for companies.
Blockchain, as the best-known DLT technology or subform, has attracted a lot of attention in recent years. This technology makes it possible to store data and transactions without the need for a central authority and thus offers companies a wide range of possibilities.
Innovative projects are using blockchain technology to enable the trading of renewable energies, for example, or to improve the management of medical data. In the art world, too, there are initial experiments to verify the authenticity of artworks via the blockchain and to process transactions transparently. The blockchain thus offers numerous opportunities to develop new business models and optimise existing processes.
Digital assets mapped on the blockchain make it possible to map and securely store assets such as real estate, works of art or even music rights in the form of digital tokens. But the use of digital assets goes far beyond pure trading.
The advantages of the technology are obvious: assets can be traded directly between the parties involved without a central authority. This reduces transaction costs, increases liquidity and speeds up buying and selling processes.
Tokenisation of assets also offers new investment opportunities. It gives investors access to asset classes that were previously unavailable to them.
Due to this development, regulatory authorities as well as international and intergovernmental organisations are also dealing with DLT in order to create regulatory framework conditions and standards. Regulatory security is the basic condition for acceptance in the markets and promotes the development of DLT ecosystems.
Not only the increasing demand for digital assets in the narrower sense is changing the market, but also the associated services. Distributed ledger technology has the potential to create more efficient markets, and it optimises the exchange and management of assets and services from the ground up.
One of the most dynamic and innovative segments here is Decentralised Finance (DeFi). DeFi is an innovative way of organising the supply of financial products that does not rely on centralised financial intermediaries, but offers users the possibility to map bank-like services in a decentralised manner.
DLT has disruptive elements along the entire value chain of banks and asset managers. Processes can be streamlined or even become completely obsolete through the automation of activities. Value chains and the associated processes and business models must be fundamentally rethought due to the disruptive nature of DLT.
Digital Assets: Not only cryptocurrency
Digital securities, also called security tokens, are securities issued and traded on blockchain networks or other digital platforms. They represent ownership rights or financial interests in an underlying asset, such as shares, bonds or investment funds. Digital securities offer advantages such as increased liquidity, programmable features and automated compliance.
Digital money refers to any form of currency or payment system that exists solely in electronic or digital form. It is a digital representation of traditional fiat currencies such as the US dollar or the euro. Digital money can be used for various transactions, including online purchases, money transfers and digital payments. It usually relies on secure cryptographic techniques to ensure the integrity and security of transactions.
Tokenised assets are digital representations of real assets such as real estate, works of art, goods or even intellectual property rights. These assets are converted into tokens that can be stored, transferred and traded on a blockchain network. Tokenisation enables fractional ownership, increased liquidity and access to a wider range of investors. Ownership and transaction records are typically stored on the blockchain, providing transparency and security.
Crypto-assets, also known as cryptocurrencies, are digital or virtual currencies that use cryptographic techniques to secure transactions and control the creation of new entities. Bitcoin is the first and most well-known example of a cryptocurrency. Other popular cryptocurrencies include Ethereum, Litecoin and Ripple. Crypto assets can be used for a variety of purposes, such as online transactions, investments and store of value, and they often offer decentralisation, security and privacy features.
We support you with innovative ideas and proven expertise
The financial industry is undergoing a profound transformation, driven by innovation in digital asset infrastructure. With greater regulatory certainty and the emergence of new players in the market, investment in infrastructure is becoming more apparent. This rapid development poses major challenges for European banks, FinTechs, asset managers and crypto custodians in determining their strategic market position.
Our team of experts specialises in providing comprehensive support to companies seeking to navigate the complex landscape of DLT and blockchain environments. As thought leaders, sparring partners and implementation experts, we offer customised solutions tailored to the specific needs of each company.
We offer insights into business models and regulatory frameworks in the digital asset ecosystem, enabling companies to develop a strategic market position aligned with their goals. Our experts provide practical solutions for implementing blockchain and DLT technology, enabling companies to realise their full potential while minimising risks.
Whether you are a traditional financial institution looking to explore new opportunities for digital assets or a crypto custodian looking to improve your security arrangements, our team can provide the expertise and advice you need to achieve your goals in this rapidly evolving market.
Feel free to get in touch, our team looks forward to hearing from you.
Further interesting Insights for you
Publications
Blog Articles (in German only)
Further Blog Articles
- Sieben Thesen zur Zukunft von digitalen Assets und digitalem Geld
- MiCAR umsetzen, Risiken begrenzen: Jetzt kommen FinmadiG und KMAG
- Umsetzung der MiCa-Regeln: Das Kryptomärkteaufsichtsgesetz kommt
- Das DLT Pilot Regime: Grundlage für eine neue Kapitalmarkt-Infrastruktur
- Paypal USD: Eine Bestätigung für die Weitsichtigen
Podcasts (in German)
Your contacts
Stay up to date with what matters to you
Gain access to personalized content based on your interests by signing up today
Jens Siebert
Partner, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
Bernd Oppold
Partner, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
Connect with us
- Find office locations kpmg.findOfficeLocations
- kpmg.emailUs
- Social media @ KPMG kpmg.socialMedia
Hot Topics in the financial sector
- Accelerating the Journey to the Cloud
- Data as a production factor in the financial institution of the future
- Incorporating Sustainability in Finance
- IT Compliance Management & Cybersecurity for the Financial Industry
- Mapping out the Future of Finance
- Prioritizing on Customer Needs
- Setting a Course for the Future of Risk
- Operational Excellence