Todd McDonald presents at Sibos 2019.

1. 11
Blockchain's Third Wave:
Tokenization, Payments
and Atomic Settlement
Todd McDonald – SIBOS 2019

2. 1 Minute Bio: Todd McDonald, Chief Product Officer, R3
15 years an FX trader 2014/15: helped launch
Enterprise blockchain
company R3, with 40+ of
the world’s largest
financial institutions
Open source platform
Corda: 300+ firms using
and building applications
across banking, insurance,
trade and more

9. A brief history of tokenization
Installation Period Deployment Period
Frenzy
Synergy
Maturity
Irruption
Turning Point
(Financial Bubble)
Bitcoin Ether & Altcoins
Source:
Technological
Revolutions and
Financial
Capital by
Carlota Perez
Maturity of Previous
Surge
Real Business Value

10. Reminder of where blockchain can reach ‘product-market fit’
• When many participants need to reach
consensus on a set of shared facts
• When many participants need to share control
over the evolution of shared facts
• When there is a need for atomic value transfer
• When there is a need to create provably-scarce
digital assets (securities, money, identity…)

11. The digital asset and tokenization sweet spot
• When many participants need to reach
consensus on a set of shared facts
• When many participants need to share control
over the evolution of shared facts
• When there is a need for atomic value transfer
• When there is a need to create provably-scarce
digital assets (securities, money, identity…)

12. *Including B2B cross border payments, KYC/AML management, Repo transactions and OTC Derivatives
Shift from cost play to value creation
$60-$80bn
Annual cost savings
across 4 use cases*
-McKinsey
$300-$400bn
Economic value
created by blockchain
by 2027
-UBS
$3.1tr
Worldwide total
business value added
by blockchain by
2030
-Gartner

13. What now?
Convergence of old and
new world is happening…
Don’t get left behind
The right ecosystem exists…
Work with a partner that can
guide you and bring together the
people, processes and technology
When, not if...
Regulators are catching up
Don’t take shortcuts
Banks &
Regulators
Delivery
Expertise
CorDapps Infrastructure
R3 Ecosystem

14. Digital asset value chain
Issuer Investor
Issuance
Registration
Exchange
Settlement
Management

15. Digital asset value chain
Issuer Investor
Issuance
Registration
Exchange
Settlement
Management

16. Digital asset value chain
Issuer Investor
Issuance
Registration
Exchange
Settlement
Management

17. Extending new asset ledgers to existing settlement/payment Rails
R3’s Corda Settler integrated with SWIFT gpi link
Corda application for two parties to create an obligation
for how and when they will settle their transaction
https://www.r3.com/videos/swift-gpi-link-and-corda-settler-
in-action/

18. Mastercard’s cross-border payments platform on Corda
Harmonize Faster Payments
schemes
Global payments and FX on
next gen payment platform
Enable value added services and
improved liquidity management

20. On-ledger value tokens
Blockchains have inspired many
types of ‘cash tokens’ across
the risk/quality spectrum

21. On-ledger value tokens
Blockchains have inspired many
types of ‘cash tokens’ across
the risk/quality spectrum

22. Wells Fargo Digital Cash: stablecoin-powered internal book transfer
• Digital cash token (aka ‘stablecoin’) to move value between Wells Fargo entities cross border
• Lowers costs, reduces transfer time, and improves service.
• Built on an internal DLT network as first of many apps to be deployed (…on Corda Enterprise)

23. Tokens living on blockchain networks allow
assets and value to:
• Move more freely while maintaining
regulatory compliance
• Settle at their own speed
• And keep everyone in sync during the
whole journey

25. What to do next?
GET THE RESEARCH
Booth U134
www.r3.com/insights
COME TO CORDACON
Oct 23 – 24, London
www.r3.com/cordacon
CONTACT US: digital.assets@r3.com

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London, EC2Y 5AU
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Bonham Strand, 7F Office 18-121
Hong Kong
www.r3.com
Thank you
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