12 April 2023

Digital Assets and Markets: a transaction costs analysis of market architectures

This report examines the market landscape for digital assets, including digitally recorded traditional securities and cryptographically secured tokens that represent the building blocks of the future tokenized economy. It shows that markets for decentralized assets are currently more costly and less efficient than centralized limit order book markets, but the difference is largely because decentralized markets are in their infancy and have not reached the volumes traded in centralized markets. This analysis provides a guide for investors selecting markets to trade digital assets and has implications for how financial market infrastructure is likely to evolve as more assets join the “tokenized economy”.

by Angelo Aspris, Anne Haubo Dyhrberg, Sean Foley, Talis J. Putnins

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