At Sibos in Miami, Mark Walker of the FinTech Times spoke with Ann Magnusson, head of investor services at SEB. They covered Europe’s fragmented markets, the changing role of central securities depositories (CSDs), and what tokenization means for trust.

Europe needs competition and access to liquidity

Ann’s first point was that Europe needs more competition and better access to liquidity. The US invests in the US, she said, and Europe needs an environment that attracts investment too, across all asset classes. She sees the Nordics as a bright spot, with a large share of the population willing to move savings into investments.

Harmonisation first, then more fragmentation

Ann thinks the custody industry has been fairly successful at harmonising. She expects more fragmentation before it improves, because new infrastructure is arriving and legacy systems need upgrading. “I see a period of time where we will have more fragmentation,” she said, “before we find the new path down the road.”

CSDs are moving to a commercial model

Many CSDs began as utilities owned by banks and their participants. Banks later sold them off, and they now run as public companies with commercial drivers. Ann called this a “hybrid situation”. In the Nordics there is competition across countries but not within them. She likes competition, but the change is slow. Participants like SEB have to spend a lot of time and effort supporting each CSD while also building their own business models.

Tokenization comes down to trust

Ann said the future of the traditional CSD is largely a question for regulators. She thinks the industry has to change how it thinks about trust: “We used to trust organizations or structures and people… in the new world, we will also need to trust technology in a different shape and form.” She expects entry barriers to fall as a result.

SEB’s approach to digital assets and a euro stablecoin

• SEB has tested blockchain technology but doesn’t expect to do it alone, so Ann expects more partnerships.
• A small team is exploring the options.
• SEB is a founding member of Qivalis, which is working on a euro stablecoin. SEB hopes to offer something simple in Q1 or Q2 next year. It is also watching tokenized deposits and local infrastructure projects.
• As a traditional bank, SEB takes a conservative line on reputational risk. “We don’t want to risk the trust of our clients and shareholders.”

Mark asked who carries the risk if a stablecoin loses its peg mid-settlement. Ann said it comes back to trust, and that it is being discussed with infrastructure providers and regulators.

Why Europe needs its own answer to US dollar stablecoins

Ann said it matters for Europe to show it is willing to push and invest. She isn’t against investment in the US, but she thinks a more balanced world is healthier, and she’d like to see alternatives to the US dollar. Resilience, cyber security and operational efficiency are all more of a focus now.

Speed isn’t the whole story

On T+1 and the push for instant settlement, Ann said clients rarely ask for speed alone. They ask for access to liquidity, transparency and trust. “If you don’t get that through the speed per se, you shouldn’t do it.” She also warned against spending money and time on changes that clients won’t value.

Looking ahead to 2030

Ann believes “the train has left the station” on AI and emerging technology, but she thinks regulation and trust will slow things down, which she called probably a good thing. By 2030 she expects the landscape in her region to look different. T+1 arrives next year, and connections to T2S and T2 are coming. On correspondent banking, she sees new technology removing layers, increasing transparency and giving clients faster access. She also wants more of the Sibos conversation to go to securities.

Takeaway

For Ann, the next phase of European market infrastructure is less about speed and more about earning trust in new technology while keeping the industry relevant to clients. I can also shorten this for LinkedIn or turn it into a newsletter post.

The post News & Views Podcast: Europe’s Fragmented Markets Euro Stablecoins And The Future Of Custody appeared first on The Fintech Times.