Just recently, Sears, the former giant retail chain that once changed how Americans shopped and lived, filed for bankruptcy. By introducing mail-order catalogues in rural America in the late 19th century, Sears disruptively changed the game for local general stores. Ever since then, the company seems to have ignored the most important drivers of economic evolution. They simply forgot to embrace the opportunities new technologies offered and were consequently overtaken by emerging competitors that shared a different philosophy.

It is yet another “Kodak moment”, a corporate behemoth rendered obsolete over time. It might not be the last: New decentralised market models, enabled by new technologies and growing computing power, have left a tremendous footprint on our world in the recent past. Today, online peer-2-peer (“p2p”) marketplaces allow us to shop quickly, painlessly and at competitive prices. With AirBnB, your hotel room for tonight is just around every possible corner. The Uber app connects drivers and passengers that share a common destination. And these are only two out of a wider range of examples. For us in the financial industry, DLT and blockchain technology will have a comparable impact.

Embracing this new technology and with it the possibility to decentralise interaction between market participants, we have the opportunity to rewrite how our markets are structured in the future. Ever since their initial conceptions, the new financial technologies have evolved significantly and their utility has become more stable and complex. Tokenization - the dematerialization and fragmentation of securities and (physical) assets - is the next evolutionary step of Capital Markets into a Digital Asset Universe.

Remember that there once was a time when securities were letters written on a piece of paper and kept in physical form in a vault? No need to say that there is quite a bit of hassle in administering actual paper in a global economy. Luckily, we have come a long way since that time. Looking into the future, the tokenization of assets and the safe custody and transfer of assets by the means of Distributed Ledgers will allow investors to vastly diversify their portfolios: Be it art, real estate, or intellectual property - if you tokenize assets, or fragments thereof, you create standardized “digital twins” that are accessible to a much wider audience than ever before. At the same time, the accompanying processes are rendered more efficient, safe and less costly thanks to the intrinsic asset servicing properties of the new technologies. Ultimately, what I see is the entire lifecycle of a financial instrument being covered. What a journey from stacks of paper in a safe!

So, is our very own Kodak moment around the corner? I don’t think so. For some industries, technology is a means to evolve. For us, technology itself is a game-changing asset. As we move into this new world of decentralized market structures and to new forms of self-servicing financial instruments, there will still be the need for a trusted third party. This is where I see us: embracing and developing new technology and continuously improving it, thus building trusted environments for digital assets and shaping the world economy of the future. Sear’s unfortunate demise shows impressively that companies must never stop putting thought and energy into finding synergies with new technologies. As for Deutsche Börse, we’re certainly on top of that.