As an emerging technology, utilizing the blockchain in financial transactions is highly appealing for its promise to more securely record and more confidently verify financial transactions, reducing the overall cost of transacting. That being said, no major financial institution or governing body has fully adopted blockchain or begun representing securities as crypographic tokens for trade, until now.
Russia's central bank recently announced that a trial for using blockchain as a recordkeeping system for digital mortgage bonds was successful. The State Duma, Olga Skorobogatove, went so far as to say all transactions surrounding digital mortgage issuance should be hosted on the Masterchain blockchain platform.
Russia's announcement comes on the heels of France's central bank announcing it used an internally developed blockchain to issue digital securities. The issuance used a digital euro, which the central bank envisions using for intrabank settlements. Moreover, China's central bank announced that it has raised $4.7 million to invest in developing its own blockchain trade platform. These announcements signal a major acceleration in the development of tokenizing securities, especially in connection with companies like IBM securing a patent in 2020 for the development of a blockchain in managing financial transactions or JP Morgan's patent application in 2019 to tokenize equities. The securities tokenization sector is reaching a boiling point, and its legitimization by major government banking institutions will surely be followed by a wave of increased investment.
