It's our Kodak moment - not effect

Do you remember the era of analog photography? Years of traveling or attending family functions with your camera at hand, always waiting for that one "Kodak moment", not knowing if you had truly captured the essence of the moment until after you got the film developed. If that ever happened, that is – I also remember shoe cartons and drawers full with undeveloped films, and don't get me started on all the photos kept in their envelopes, to be put in family albums "when I have some time".

Fast forward to today, where you can snap a picture, even modify it immediately, and send it to family, friends, or the social media platform of your choice within an instant. Just like that, your gorgeous selfie will exist in many places and no longer collect dust in obscurity.

In our corner of the industry, we are looking at a similar development: Blockchain technology will enable us to tokenise assets, whereby traditional products are substituted by digital assets – a digital, tokenised version of a financial product. This is potentially game-changing because if collateral that is currently locked up in different markets to cover specific exposures (stashed away in various photo albums, if you will) were to be tokenised, you could free up significant amounts of (tokenised) collateral for use across financial markets. Furthermore, tokenised collateral also has the potential to reduce fees and transaction costs, bring about faster transaction times and automate numerous functions of the process.

The question remains: Were a new entrant to bring this technology into the financial world, would the incumbents face their very own "Kodak effect" - their traditional functions and roles within financial markets being replaced entirely? Depending on whom you speak to, you receive a different answer. Some say that those that have built their business franchises on gathering assets on their books would be outplaced by new entrants tokenising assets and operating settlement transaction through distributed ledgers using blockchain technology, and others believe there will be more symbiotic relationships, where the best of both worlds come together to create something new and improved.

I am of the opinion that there will be coexistence, with the need for infrastructure in place to bridge the gap between the owners of the assets and the digital holder or their service providers. A financial services Cloud, if you like, combining a contractual framework with the latest in blockchain technology, operating within a legal environment under the supervision of the regulators.

And this is where Clearstream intends to be, at the forefront of technological chance, ready to capture our Kodak moment – and share it, of course.