Views on Digital Asset Markets - Scott Lucas (J.P. Morgan)

The largest financial institutions in the world are taking technology seriously - both as an opportunity and a risk. The same goes for the nascent crypto and digital asset industry.In conversation with Ian Simpson, J.P.Morgan Managing Director and Head Markets Digital Assets Scott Lucas discussed the tectonic plates moving in capital markets, the potential for DLT and blockchain to bring value to established market participants - and how large financial institutions are thinking about the future of markets.He also discussed the value (real and perceived) of tokenization, the potential for stablecoins, including why “competition is good” - and how settlement could and should look in digital asset markets.(00:58) - Intro(3:40) - What makes "good markets" ?(6:06) The "optimal mix" or "minimal threshold" for new markets(7:31) How J.P. Morgan looks at markets - new and old(8:48) - The minimum barrier in crypto markets(11:34) - The art of the possible and the useful(12:34) Evaluating risk factors in new markets like crypto(14:44) New technology alongside existing frameworks(15:31) J.P. Morgan's inter-day repo as an example(17:01) The high-level benefits of DLT and blockchain tech(18:18) A wider-flatter market vs narrow and centralized(19:15) If a regulator said "yes" today...(20:07) When innovation comes to the table(21:08) "Entitled" transparency(22:07) Top-down vs bottom-up "shift"(24:56) US vs Switzerland in the regulatory race(26:24) Placing the "barrier" in the right spot(28:18) The opportunity for Switzerland(29:43) Capital requirements as a "gating factor"(32:24) Financial market infrastructure for a bank like J.P. Morgan(33:29) The downside of disintermediation(34:12) Copying current capital market processes(37:06) Some things are here for a reason...(38:37) The ideal settlement model for big banks in digital assets(40:41) The meaning of stablecoins for big banks(43:53) Stablecoins in the wider capital markets(45:05) Stablecoins as a settlement mechanism(46:28) J.P.Morgan and tokenization(49:13) Mobilizing (tokenized) collateral to support margin(53:25) Different markets or one market?(55:22) Partnerships moving the market forward(57:11) What would really draw J.P. Morgan into crypto and digital assets?-----ABOUT THE HOST: Ian Simpson is Director of Marketing and Communication at RULEMATCH as well as host of the RULEMATCH Spot On podcast, focused exclusively on the institutional crypto and digital assets industry. Previously he was Head of Marketing at Bitcoin Suisse and Head of Communications at the Crypto Valley Association. Ian is a veteran of the Swiss crypto and digital assets industry since 2017. His insights on the Swiss crypto and blockchain ecosystem have been featured in CoinDesk, the leader in blockchain news.------Disclaimer:The information contained in this podcast about RULEMATCH AG (“RULEMATCH”) and any guest company is for general informational purposes only and should not be considered exhaustive. They do not imply any elements of a contractual relationship nor any offering.