The paper makes an effort to address the specific issues raised by the development of blockchain technology concurrently with conventional financial systems, as well as the growing threat of liquidity fragmentation resulting from the expanding variety of blockchain use cases throughout the financial industry.

The framework developed by the Monetary Authority of Singapore's Project Guardian in 2023, which lays out essential conditions for achieving blockchain interoperability with flexibility, security, privacy, transparency, scalability, and transaction monitoring, is largely taken into consideration by its stance.

The partners will debate the paper's conclusions at a panel discussion held next month at Zürich, Switzerland's Point Zero Forum.

"As their clients adopt different chains, asset servicers will likely need to provide multichain asset interoperability and servicing," says Anand Rengarajan, global head of sales and head of securities services APAC, corporate bank, Deutsche Bank.

"To enable sustainable growth that multiple chains can amplify, asset servicers must have the ability to address and service interoperability with scale, while ensuring digital asset safety."

As previously revealed last month, the German bank is presently conducting a number of trials with Project Guardian to support tokenized and digitized money using a “open architecture and interoperable blockchain platform,” with an emphasis on the initiative's asset and wealth management workstream.

Georgios Vlachos, director of the Axelar Foundation and co-founder of the Axelar protocol, continues, "Tokenized assets are by nature interoperable, bridging assets recorded on off-chain ledgers with on-chain representations."

"How do we enable potentially thousands of connections across on-chain and off-chain ledgers in a way that is safe, scalable, and open is the question, not how do we facilitate one such connection."