A new clearing and settlement landscape is emerging for publicly traded securities and private digital securities.
Operations staff members will have to find a way to integrate these two worlds as it will become “super important,” says Alan Konevsky, the interim CEO and chief legal officer for TZero via an FTF News live interview.
At some point, the old school of settlement and other key securities operations will converge with the new operations regime needed for digital assets and blockchain technologies, Konevsky says. For the moment, the digital/blockchain changes have been happening at an iterative pace of integration
Yet there is a “premium integration” to come between legacy systems and new blockchains, which will become “super important,” Konevsky says via the interview.
“TZero developed a patent in 2019 that governs aspects of integration of legacy Wall Street systems with blockchain-based trading environments,” Konevsky says. “I think the pace of integration of systems … it’s not going to happen overnight … You can imagine how long it’s going to take for the system to really evolve to, well, T-0, and integrating in a frictionless way is going to be really important.”
The emergence of bitcoin and other cryptocurrencies, based on cryptography technologies, are driving change and remain controversial, Konevsky says.
“Crypto has been a curse and a blessing,” Konevsky says. “Crypto, of course, has elevated the conversation about the benefits of blockchain. It’s also been a downside in the sense that people conflate a whole bunch of issues around digital security innovation with things that they rightly or wrongly believe about believe about cryptocurrencies.”
Regulation may help bring some clarity to the conflation. “Engaging in that continuous dialogue with regulators, policy makers and business partners is really important and a challenge,” Konevsky says.
The interview, recorded on Dec. 2, also covers:
- An update on the availability of clearing and settlement services of the tZero ATS;
- Aspects of the clearing and custody model for private digital securities trading;
- What tZero has learned about the usage of blockchain technology for securities operations;
- And the new support firms may need for the operations to support digital and publicly traded securities transactions.
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