Volume 2:Q125

Welcome to Volume Two of The Ledger, Tokenovate's quarterly newsletter.

Can you feel it too? Pace is definitely picking up. Despite ongoing macroeconomic uncertainty, there is a clear push for progress in post-trade lifecycle management innovation.

In this edition, we unpack some of those trends, and share stories about what the Tokenovate team has been up to in Q1.

Operationalising CDM

The Common Domain Model (CDM), available through FINOS, is a standardised, machine-readable, and machine-executable data and process model that defines how financial products such as repo, securities lending, bonds, and derivatives are managed throughout their lifecycle. Developed through collaboration between ICMA - International Capital Market Association, ISDA, and International Securities Lending Association (ISLA), the CDM helps automate trade processing and regulatory compliance.

For Tokenovate, the CDM forms an integral part of our technology stack. It provides a digitally-executable blueprint that codifies the operational standards necessary to implement commercial, legal, and regulatory frameworks within capital markets. With high governance standards and growing market adoption, the CDM provides a robust foundation for automation within capital markets.

Richard, Ciarán, Stephen and Steve wrote a comprehensive paper on the topic, which you can download here (PDF). And at ICMA’s CDM Showcase held at State Street in London in February, Stephen demoed a selection of our capabilities to a room full of CDM-professionals. You can view his slides and watch the video from the Showcase here.

The Living Lab

As part of our go-to-market activities, we’ve been organising in-room, hands-on workshops called the Living Lab (read more here). Organised in conjunction with the Investment Association and ISDA, the Living Lab combines theoretical musings with practical exercises using our platform. Attendees praised the sessions, highlighting the practical understanding gained around tokenisation processes:

“Well done on practical exposure to implications of the technology. The expertise of the team is well appreciated”, and “The demo of actual trades provided a much clearer understanding and demystification of tokenisation, especially following the morning sessions.” 

The headline for the first couple of Living Labs has been “Exploring Use Cases for Fund Tokenisation”, and gives you an opportunity to experience technology, processes and workflow development driving the later stages of the tokenisation process. Companies attending include Aberdeen, Barclays, BNY, Fidelity, LGIM, LSEG, T Rowe, UBS, and Vanguard - to name a few. Feel free to reach out if you are interested in learning more about any future Labs!

Digital Assets: Schrödinger’s Property?

In February, our Chief Legal & Product Officer Ciarán McGonagle co-authored an article together with Professor Andrei Kirilenko, Founding Director of the Cambridge Centre for Finance, Technology and Regulation (CCFTR), published in the Journal of International Banking and Financial Law. You can read the full article on our website here.

In summary, the article argues that digital assets have disrupted traditional property law, recognised in English law as a distinct "third category" due to their blend of physical and intangible traits. The Law Commission advocates a flexible, technology-focused approach to disputes, cautioning courts against rigid analogies and urging consideration of each asset's technological specifics.

However, the D’Aloia case highlights challenges, as traditional tracing principles struggle with complexities of account-based blockchain systems. Blockchain architecture remains pivotal: UTXO-based systems allow remedies akin to physical property through traceable outputs, whereas account-based systems obscure individual ownership, complicating legal remedies.

We are now ISO 27001 Certified

From our inception, safety, security, and high standards have been at the core of our operating principles. We are therefore proud to announce that Tokenovate is now ISO 27001:2022 certified. Read more about it here.

Driving post-trade automation for collateralised transaction

Our friends at Future of Finance (FOF) interviewed Ciarán for their YouTube channel. You can view and hear the conversation here.

During the 52-minute interview, Ciarán delves deeper into the root cause of how post-trade processes manage the risks linked to complex, long-dated transactions such as derivatives and SFTs, involving future cash flows or asset deliveries.

Over recent decades, especially since regulatory reforms following the 2008 financial crisis, this infrastructure has grown significantly more intricate, creating a fragmented environment of siloed systems and processes across institutions. New technologies like blockchain, tokenisation, and AI offer promising solutions to streamline these processes, enhance operational efficiency, and lower associated costs.

Simplifying post-trade operations matters beyond finance because capital markets are essential to economic growth, corporate innovation, risk management, and the successful implementation of macroeconomic policies - making their efficiency directly impactful on society's overall prosperity.

Chairing the CDM Tokenized Assets Working Group

Earlier this year, we joined both the Linux Foundation and FINOS (we also became members of ISLA), underscoring our commitment to cross-industry collaboration. To solve the challenges we're facing, the entire industry needs to rally around suitable, fit-for-purpose standards - such as the CDM.

Tokenovate dove straight into the community by founding and chairing the Tokenized Assets Working Group within FINOS, which aims to introduce tokenisation attributes to the existing asset model without creating unnecessary complexity. You can read more here.

Meet the Team

The Tokenovate Team will be speaking at as well as attending several events, shows and conferences in the second quarter of 2025. Let us know if you want to meet up at:

ISDA AGM - May 13-15 | Amsterdam

FT Digital Asset Summit - May 6-7 | London

London Blockchain Finance Summit - June 3 | London