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Custody chains and asset values: why crypto-securities are worth contemplating

Author

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  • Micheler, Eva

Abstract

Computerisation facilitates instantaneous and direct links between all of us in our work and social lives. At the same time, and counterintuitively so, securities are increasingly held indirectly through chains of custodians that operate between issuers and investors. This disconnects investors from issuers and can significantly reduce the value of assets. The regulatory framework does not prevent this effect. UK regulated holders of client securities should be required to hold these directly in the name of the investor. At an international level it is worth asking if the technology underlying bitcoin and other cryptocurrencies can be used to create an un-intermediated securities ledger connecting investors and issuers directly.

Suggested Citation

  • Micheler, Eva, 2015. "Custody chains and asset values: why crypto-securities are worth contemplating," LSE Research Online Documents on Economics 62609, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:62609
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    File URL: http://eprints.lse.ac.uk/62609/
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    Cited by:

    1. Benos, Evangelos & Garratt, Rodney & Gurrola-Perez, Pedro, 2017. "The economics of distributed ledger technology for securities settlement," Bank of England working papers 670, Bank of England.
    2. Randy Priem, 2020. "Distributed ledger technology for securities clearing and settlement: benefits, risks, and regulatory implications," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-25, December.

    More about this item

    Keywords

    shares; debt securities; interests in securities; custodian; depositary; client asset rules; cryptocurrency; financialisation;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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