LONDON – Celent has released a new report titled Blockchains and Digital Currency Wars. The report was written by John Dwyer, a Senior Analyst with Celent’s Securities & Investments practice.
We are witnessing extraordinary innovation impacting means for transferring value. This is creating a new digital asset class which can be moved on a peer-to-peer basis, with optimized settlement-cycles, thus reducing or even eliminating counterparty risk.
The next wave of digital assets could finance the architecture of a new decentralized Internet and, for those investments that are successful, are likely to generate financial returns which are unparalleled in nature.
Titled assets can be moved on a P2P basis with optimized settlement cycles and settlement finality.
These include permissionless cryptocurrencies, permissioned cryptocurrencies, and precious metals integrated on a Blockchain/DLT. Baby boomers turn 71 this year and will be legally required to begin taking Required Minimum Distributions from their retirement assets.
The impact on volatility, liquidity, and overall capital allocation as baby boomers monetize their retirement assets will be a key period for the capital markets to digest.
This is coinciding with the emergence of a new digital asset class which can offer extraordinary upside. Financial institutions need to think very carefully and creatively about how they tailor their digital strategies to address these key trends.
“The extraordinary price action of cryptocurrencies cannot be ignored. These remain high-risk assets given the issues around Proof of Work, 51% attacks, and privacy, among other issues. However, a combination of asset, monetary policy, and technology trends are converging which are redefining the global financial system. The Enterprise Ethereum Alliance is one very good example of how enterprises are actively engaging with this ecosystem,” Dwyer commented.
“We are in the early stages of a new wave of digital assets which have the potential to create, transfer, and even destroy enormous amounts of wealth. The theme of Decentralization is going mainstream, and its impact is going to be profound,” he added.
About Celent
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].