01 May, 2020 | AtoZ Markets – Capital Markets and Technology Association (CMTA) is an independent non-profit association created in Geneva in 2018. It promotes the adoption of distributed ledger technologies (DLT), such as blockchain and digital assets in the financial markets.
The Swiss-based Association CMTA has published common industry guidelines for the custody and management of crypto. Called Digital Assets Custody Standard, its main objective is to clarify the difference between the storage of digital currencies and traditional assets.
Crypto Storage Requires A New Guideline
New Document represents the first step in the Swiss financial sector towards a consensus on common standards for the custody and management of digital assets. The association also believes that the custody sector needs specific basic operational and security requirements to mitigate risk exposure. CMTA Secretary-General Fedor Poskriakov, Partner of the Swiss Law Firm Lenz & Staehelin, stressed:
This will significantly contribute to the emergence of fully digital capital market infrastructures, including integrated custody and secondary trading venues. The benefits of digitalization of the financial industry are such as the move towards decentralized infrastructures seems inevitable.
The CMTA also highlighted the difference between centralized and decentralized technologies. It noted that the custodians of crypto must provide higher levels of security as platforms use crypto technology to store assets.
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With the guidelines, the association attempts to secure the legal side of the Swiss crypto industry. It will ultimately help it promote technology and services. Establishing a baseline for custody, the CMTA highlighted some of the benefits it sees in using DLT for the financial markets.
The association also believes that small and medium-sized enterprises (SMEs) can also benefit from decentralized technology. It can simplify and democratize their financial mechanisms.
According to the CMTA, DLT can allow SMEs to issue and trade securities on decentralized platforms. It also allows using disintermediation and new digital infrastructures to access markets usually reserved for large market participants.
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