Much of the case for adopting distributed ledger technologies revolves around achieving greater efficiency and reducing time and risks to post-trade clearing and settlement. But first, important technological challenges will need to be addressed to permit widespread adoption and migration away from legacy systems and networks.
These include the need for standardization, the development of protocols that will permit interoperability between other ledgers and networks, and the reduction of computational intensity and costs. Moreover, distributed ledgers will have to compete with other options and priorities of financial firms and clearinghouses in a highly regulated financial ecosystem.