Institutional finance on the blockchain: A future in progress
Institutional finance is moving to the blockchain with wide-reaching opportunities for all involved in capital markets.
During a fireside chat at The Agora with Bloomberg’s Global Head of Financial Markets and Industry Product, Emilie Gallagher, we talked about how the organization is approaching this move, discussing its digital asset strategy and how strategic partnerships with firms like Kaiko and Canton are helping make tokenized markets more usable, integrated, and institutional-ready.
The chat’s prevailing takeaway was that in order to see widespread blockchain adoption by established issuers, exchanges, and asset managers, they must have total confidence in the synchronicity of their onchain and offchain markets. For this to become a reality, they need to use the same trusted market data providers they use for existing offchain offerings.
However, this raises challenges as large traditional market data providers are not in the business of tokenization. Instead, their expertise lies in offchain data responsibility, industry standards, and reliable methodologies. That’s why data providers such as Bloomberg are exploring onchain opportunities through partnerships with more specialist organizations like Kaiko.
Emilie expanded further on Bloomberg’s recent initiative, “Our first strategy where we’ve worked is to bring Bloomberg’s trusted data onchain for things like tokenized workflows. We’ve recently announced a partnership with Kaiko to use their infrastructure to bring licensed data, so if I’m a Bloomberg customer, I can bring that licensed data to smart contracts or application use cases. So that’s really exciting, we’ve seen a lot of clients interested in it. Our initial focus is on the Canton network, which is where most of at least the customers that are interested in the solution are.”
Maintaining the standards of institutional-grade data
Institutional-quality market data onchain from the likes of Bloomberg only remains at that institutional-quality if it’s backed by the right data infrastructure to deliver it to and from the blockchain.
Emilie commented on the importance of picking the right partners, “When we think about who to partner with and when, there are some common values on which we must be aligned on our standards, particularly around data integrity and governance, and that’s true with Canton, and it’s certainly true with Kaiko. When we think about partnerships, we’re really grounded in who shares the same ethos.”
Kaiko has a long history of working with blockchain technology for institutional use-cases, and its well-established working relationship with Bloomberg ensured the partnership was a natural fit.
Speaking on this special relationship, Kaiko CEO Ambre Soubiran added, “Kaiko and Bloomberg have been working together since 2018 when we started working on financial instruments global identifiers (FIGIs), which are like data standards, taxonomy things for data management. Bloomberg has been working and thinking through digital assets over a long period of time, taking a very data responsible approach.”
See the full discussion around Bloomberg’s digital asset strategy and the convergence of TradFi and DeFi here.
