From Sandboxes to Regulatory Reform: Charting a Path for Tokenised Asset Regulation

Financial authorities from across the world are exploring different approaches to enable and support the adoption of distributed ledger technology in financial markets.

In an era of geopolitical competition and mounting investment needs, asset tokenisation holds the promise of improving competitiveness and contributing to growing and developing more liquid and efficient capital markets. However, tokenisation also presents risks, and an overhaul of regulatory frameworks and financial market infrastructure are arguably required for tokenisation initiatives to scale at jurisdictional and global levels.

Some advanced economies have taken a targeted, collaborative approach to supporting tokenisation, with the development of sandboxes and the launch of public-private initiatives (e.g. Project Guardian). Rather than importing developed market models, Emerging Market and Developing Economies (EMDEs) may have an opportunity to build new market structures that leapfrog traditional systems and traditional financial market infrastructure. Yet, sustainable growth in tokenisation will require appropriate regulation and oversight.

The objective of this regulators-only roundtable discussion is to identify the challenges and foster alignment on recommendations for building appropriate regulatory frameworks to enable tokenisation to scale. Participants will take stock and discuss the lessons from established regulatory innovation initiatives and how they are evolving with the market and technology, before exchanging views on the differing risks and opportunities for advanced and EMDEs.