Data Tariffs 2.0: DLT in a Multipolar World

by John Dwyer, December 16, 2016
Vendor Reviews
Global, EMEA

Abstract

Celent has published a new report titled Data Tariffs 2.0: DLT in a Mulitpolar World. The report was written by John Dwyer, a Senior Analyst in Celent’s Securities & Investments practice.

It is estimated that half of the value of the global economy will be created digitally by 2025. The digital economy fundamentally challenges international borders; hence there is the potential for a ramp-up in digital trade wars as new technology such as distributed ledger technology (DLT) moves from concept to reality.

Data localization rules have been unfolding for some time. The assumption that regulators will permit the free movement of data across boundaries for DLT is open to question. Indeed, it may trigger a new phase of data tariffs. For key jurisdictions such as China, central bank digital currency has implications for data localization, international payments access, and capital outflows. These issues have financial, political, and geopolitical significance.

“The race is on to commercialize a DLT use case, but the regulatory issues are acute. As DLT moves from concepts to pilot stage, understanding different regulators’ perspectives will provide critical insights to the emerging global regulatory framework,” Dwyer said.

“Governments and central banks globally are positioning themselves for digital legal tender, and they will want absolute sovereignty over key data and access to any global payments system. The implications for DLT from a regulatory and architecture perspective remain unclear, but they will be profound,” he added.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Takeaways

2

Key Questions

3

Introduction

4

 

The DLT Dividend

4

 

Fintech Maturity Cycle

4

Data Tariffs

7

 

The Joint Commission on Commerce and Trade

8

China

9

Key Drivers of Success of DLT in 2017/18

12

 

Key Drivers of DLT Regulation

13

Concluding Remarks

15

Appendix

16

Leveraging Celent’s Expertise

17

 

Support for Financial Institutions

17

 

Support for Vendors

17

Related Celent Research

18

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