Written with Boston Consulting Group, Clifford Chance and Cravath, Swaine & Moore, the report evaluates the opportunities and risks of DLT and DLT-based securities and assesses the applicability of existing legal, regulatory, and risk management frameworks.

It focuses on three emerging use cases: collateral management; tokenisation of assets; and sovereign and quasi-sovereign bonds.

The technology could have "transformative cost-saving and operational efficiency benefits", (for example, approximately $20 billion annually in global clearing and settlement costs) and could unlock innovation-led growth, broader market access, and new liquidity pools when operating at scale.

However, DLT has yet to see any significant take-up in the sector, prompting the GFMA to call for action both from market participants and regulators.

The organisation says that there needs to be harmonised global regulatory and legal frameworks; consensus on common standards to boost interoperability; resource commitment; collaboration; and the development of DLT-based payment options.

Adam Farkas, chief executive, GFMA, says: “Distributed Ledger Technology holds promise for driving growth and innovation. This potential should not be ignored or prohibited where regulatory oversight and resiliency measures already exist.

"Policymaking should focus on creating a regulatory framework that supports financial stability and responsible innovation in digital asset markets while also setting out a level playing field for both new entrants and regulated financial institutions. A technology-neutral and outcomes-based approach to regulation is crucial."