DLT security standards may turn legacy industries into blockchain innovators

In order to drive mainstream adoption, the InterWork Alliance - a nonprofit organization dedicated to creating global standards for tokenized ecosystems - has announced the formation of two new member-led business working groups.

The Distributed Ledger Technology Security and the Global Trade and Supply Chain, both of which will focus on creating standards for the security of tokens being used in financial services.

"The concern is that traditional security measures developed for transactional systems may not be adequate when applied to tokenized services deployed to distributed ledger technologies. At present, the distributed ledger technology landscape is filled with fragmentary standards and guidance with respect to security considerations."

To ensure an efficient security framework, the IWA security working group has appointed Bill Izzo as its chair.

Izzo also serves as the Depository Trust & Clearing Corporation's director of security technology team, which recently published a white paper on the security of DLT networks.

Izzo further mentioned that tokenization is an important element to ensure that financial use cases relying on DLT systems are secure.

Izzo hopes that the DLT security business working group will create a series of use cases for tokenization across the financial sector to reduce risk, decrease costs and increase DLT security capabilities.

Ultimately, mainstream adoption for tokenized business use cases have been complicated due to a lack of standards and regulations, according to James Rilett, senior director of innovation and digital strategy at S&P Global Platts - a division of S&P Global that provides energy and commodities information to customers in over 150 countries.

In order to successfully combat current regulatory challenges, DiMarzio explained that the new IWA working groups will follow a standard process of articulating and defining the elements of a specific use case under study.

IWA will then look to take the findings and turn them into standards, which will be returned to the business working groups for validation.