Eiichiro Yanagawa, a senior analyst at research and advisory firm Celent, believes Synfini has the potential to become a core service in the future. “It appears to be an initiative that is consistent with the significance of providing DLT platform services on stock exchanges,” he says.

The use of DLT to create new financial markets and infrastructures is increasing, exemplified by attempts to build a comprehensive infrastructure that stores and manages corporate bonds, stocks, and other securities issued as security tokens using DLT, along with a wide range of the securities value chain, including post-trade operations, immediate settlement, custody services, corporate actions, compliance, and trade monitoring.

Yanagawa says a possible incentive for building a securities value chain using DLT is the further promotion of straight-through processing and efficiency improvements in the securities market infrastructure to reduce the cost of securities issuance and trading.

Another possibility is that these cost reductions will facilitate the development of new securities markets, particularly in small-cap investment and issuance, and the securitization of other assets. Yanagawa says exploring future initiatives, involving emerging tech like DLT, could also prompt more market structure firms to restructure their IT systems and traditional designs in settlement services.

In the future, he says, in addition to the services that exchanges provide, their competitive advantage will depend on the underlying infrastructures used to support them.

Utility services provided by exchanges—such as scalable structure, data validation, efficient processing for pre-to-post-trade, and collocated securities transactions—will continue to multiply, says Yanagawa. “This is not only an effective use of the next-generation technology of DLT, it is also an essential factor for the healthy development of the exchange centric capital markets ecosystem.”

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