Blockdaemon’s EMEA team attended and spoke at the 2023 European Blockdaemon Convention last month in Barcelona. Below we share the top 4 Digital Asset related themes and lessons learnt from the event in relation to blockchain adoption and wallet technology. These trends may well shape the future of blockchain and digital assets. 

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1. Tokenization is at the heart of banks’ blockchain plans

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• The majority of banks and infrastructure platforms are focusing their blockchain efforts on the tokenization of traditional real-world assets.
• The tokenization of fixed income instruments, bank deposits, as well as payment stablecoins are some of the most popular, and more immediate, use cases.
• Custodians, banks, and clearing houses are increasingly considering how to  provide custody services for these digital assets.

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2. Private-permissioned networks are best for tokenization

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• While a variety of token standards are being deployed, it is unanimous that private networks are being used to host banks’ blockchain projects.
• A handful of private chains are currently dominating, but the market is still a distance from establishing any true market standard.
• Solutions which enable interoperability between private chains will be essential to avoid excessive fragmentation.

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3. Fully on-premises and bifurcated wallet technology is essential

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• Heavily regulated financial institutions need 100% control over their keys. 
• Wallet technologies that expose institutions to counterparty risk, in the form of another entity playing a role in their key management, are not suitable to build a scalable blockchain business. 
• Additionally, the ability to bifurcate tokenized and crypto assets within a single digital asset wallet will be critical. 

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4. The security debate: MPC vs. HSM 

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• Hardware Security Modules (HSM) are a foundational TradFi security component. One of the many benefits of HSMs is the physical nature of hardware appliances and ability to locally host for regulatory compliance and control. 
• Multi-Party Computation (MPC) has emerged as the de facto key management technology of choice for institutional digital asset wallets. When compared with HSM, MPC provides superior flexibility and operational efficiencies, while maintaining comparable and in some ways superior security. 
• Self-hosted MPC wallets provide the perfect combination of security, flexibility and control to support regulated services such as tokenization.

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Learn how Blockdaemon can help you with tokenization - get in touch today!

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