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Digital assets, distributed ledger and more – thrilling projects in a disruptive environment
Release date: 5 October 2023
Are you planning a career in the disruptive environment? Are you familiar with digital assets and blockchain? Then joining zeb might be just the right thing for you! My name is Michael and I have been working as a consultant at zeb for one year. I am passionate about all things related to digital assets. And I want to tell you what’s behind it, how this exciting asset class is increasingly brought into the spotlight of the financial industry, and how we are helping financial institutions prepare for the new opportunities and challenges in the digital assets context.
The Wild West of digital assets
Cryptocurrencies like Bitcoin are known to be extremely volatile. Reports of rapid price gains attract new fortune hunters who, in return, drive the price up. This may seem to be good news for some people, but detrimental to the global spread as a recognized asset class. Actually, cryptocurrencies are no longer attracting the interest of technical experts or speculators only. On the contrary: cryptocurrencies and the underlying distributed ledger technology (DLT) have become a mega trend in the investment and financial services sector as well. Established players are identifying opportunities for additional return and diversification in cryptocurrencies. The underlying technology also has the potential to make complex processes in the value chain of the capital market largely independent. At the same time, the cryptocurrencies' field of application as part of “digital assets” is only one of several potential fields of application that are increasingly brought into the spotlight of the financial industry.
How do digital assets and DLT actually work?
Cryptocurrencies (e.g. Bitcoin) and tokens are called digital assets, i.e. digital representations of values. Blockchain or more generally distributed ledger technology (DLT) is at the heart of digital assets. A distributed ledger can be described as a digitally managed and decentralized book of accounts. Originally developed as the technological basis for Bitcoin, DLT can be used to record peer-to-peer transactions in digital payments and commerce. In doing so, it enables payments and commerce entirely without the influence of a central authority (e.g. a bank). This technical finesse of DLT to process transactions and trade “without a bank” seems quite theoretical at first glance, but has far-reaching implications for the traditional financial world. Nevertheless, traditional banks usually do not have the necessary know-how and experience yet to offer this to their customers. Therefore, we are increasingly involved in interesting projects in which we help our clients understand and master this technology.
Digital assets are not just cryptocurrencies ...
Cryptocurrencies are virtual “currencies” that are not issued by a government or central authority. They are used as an alternative means of payment. Cryptocurrencies are therefore not based on any real asset (unlike stocks) and have no value-guaranteeing issuer (e.g. central banks). This can lead to a comparatively high volatility of cryptocurrencies. There are now a plethora of different cryptocurrencies – from established ones like Bitcoin and Ether to ephemeral, highly volatile parody “currencies” like Dogecoin.
... but also security tokens
In principle, share certificates can make any asset tradable. When they are mapped onto a DLT, they are referred to as security tokens. Unlike cryptocurrencies, security tokens represent a specific asset in the real world. Every asset (such as shares, bonds, rights, but also art or real estate) can thus be represented (“tokenized”) as a security token and, according to cryptocurrencies, made transportable and tradable from peer-to-peer without the influence of a central authority.
Digital assets are turning into financial instruments
In early 2020, cryptocurrencies and security tokens were regulated as “crypto assets” and have since constituted financial instruments and, in the case of security tokens, even securities. This means that it is possible to issue and trade crypto assets in the regulated and controlled environment of the capital market. As a consequence this creates certainty and thus increases the attractiveness of this asset class. In addition, activities related to crypto assets, such as the safekeeping of digital assets in digital wallets, have been established as a new financial service. This gives financial institutions regulated access to digital assets, allowing them to benefit from the potential returns and diversification.
Your chance to shape the financial world of tomorrow
The regulatory framework for digital assets is increasingly turning them into accepted asset classes, thus creating more confidence among investors. There have already been some regulatory initiatives at both international and national level, which will lead to a continued consolidation of this asset class in the financial system.
The disruptive potential of innovative DLT for the products and business models of new as well as established financial institutions is high. We at zeb support this change in order to secure and further expand the competitiveness of market players in the long term. Would you like to join us?
Our service portfolio ranges from developing the strategic objective of a financial institution in the digital assets context as well as the conceptual design of new business models and DLT structures to transforming and coordinating processes in securities services based on DLT solutions.
If you want to be part of the future of investing in the context of digital assets and help us shape the financial world of tomorrow, then apply for a job with us. We are always happy to welcome new talents.
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