The evolution of financial market infrastructure: from digitalization to tokenization

Guo, Dong and Zhou, Peng ORCID: https://orcid.org/0000-0002-4310-9474 2023. The evolution of financial market infrastructure: from digitalization to tokenization. International Journal of Innovation and Entrepreneurship 2 (1) , 2. 10.56502/IJIE2010002

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Abstract

This paper examines the historical development and cross-sectional heterogeneities of Financial Market Infrastructure (FMI). From an evolutionary perspective, we review and compare FMIs in the US, Europe, and China. We identify an emerging trend in which the development of FMI is transitioning from digitalization to tokenization with the rise of Distributed Ledger Technology (DLT). Digitalization reinforces centralization, while tokenization promotes decentralization, posing complex challenges to regulatory framework which is also part of FMI. We then specifically analyze DLT-based FMI in the bond market, evaluate different models of tokenization, and propose a heterogeneous consortium blockchain solution.

Item Type:	Article
Date Type:	Published Online
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance H Social Sciences > HJ Public Finance
Publisher:	MDPI
ISSN:	2753-6297
Funders:	The National Social Science Fund of China
Related URLs:	Publisher
Date of First Compliant Deposit:	7 March 2023
Date of Acceptance:	23 February 2023
Last Modified:	03 May 2023 09:08
URI:	https://orca.cardiff.ac.uk/id/eprint/157550

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