Why Digital Finance Needs Connected Standards, Not More Identifiers

As traditional and digital asset markets converge, the priority must be on evolving and connecting the standardized identifiers that already keep data trusted and interoperable across systems, asset classes, and borders.

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Standardized identifiers are the common language of markets. Identifiers such as the Legal Entity Identifier (LEI), the International Securities Identification Number (ISIN), and the Classification of Financial Instruments (CFI) code form the backbone of market infrastructure and allow data to move across systems and jurisdictions.

Their value now extends well beyond regulatory reporting. Market transparency and supervision, data management, and Know Your Customer (KYC) processes, for example, all depend on consistent identification. Without standards, markets fragment and become inefficient. With them, investors, issuers, regulators, and infrastructure providers operate from a shared reference point, with the consistency that cross-border activity requires.

Now, as digital assets move into mainstream financial infrastructure, a key question is how existing identifiers can evolve to keep data connected across systems, asset classes, and jurisdictions.

Standards stay relevant only when they evolve

Recognizing where existing standards fall short – and whether a given standard adequately identifies a given instrument – is the starting point for keeping them fit for purpose.

Take the ISIN. It has been in use for over 40 years, and that longevity is often presented as evidence of stability. Yet it is more accurate to call it evidence of adaptation, as the ISIN remains fit for purpose only because it has changed in response to market needs.

That adaptation depends on governance. The Association of National Numbering Agencies (ANNA), as the Registration Authority for the ISIN, runs a structured feedback loop: market participants raise issues through their national numbering agencies, which feed into updates to the ISIN Guidelines. The industry raises comments through National Standards Bodies, which feed back to ISO through a consensus-driven process. Those agencies act as central points of knowledge in their jurisdictions, surfacing local requirements and elevating them to an international level. Systematic review allows a standard to absorb new use cases without losing its core, and this will be key to addressing the coverage gaps introduced by digital assets.

Coexistence, not a big bang

There is a tendency to frame the shift to digital assets as a clean break: traditional finance on one end, decentralized finance on the other. Yet the more realistic path is coexistence. Traditional and digital asset environments will need to interoperate over an extended period.

This matters because change carries cost, and that cost is borne downstream. Banks, issuers, and infrastructure providers will not switch to something new on a single day. Introducing an entirely new identifier or data field imposes a real burden on the firms that have to consume it. The more workable approach is to extend and connect the standards already in place.

This position establishes identifiers as transition infrastructure that lets the market move toward digital assets without rebuilding every data connection from scratch. LSEG's (The London Stock Exchange Group's) winning project at GLEIF's Global vLEI Hackathon, in the Digital Asset and Financial Infrastructures category, is a useful illustration. What that project demonstrated was not a new layer of process, but the opposite: existing standards applied to streamline identity resolution in a digital asset context.

Identifiers work as a connected hierarchy

To understand the case for extending existing identifiers, it is useful to recognize how the main identifiers relate to each other in financial markets. They are not competitors. They sit at different levels of granularity, like a pyramid. The legal entity sits at the top, identified by the LEI. Below it sits the instrument, identified by the ISIN, or, for over-the-counter derivatives, by the Unique Product Identifier (UPI), followed by the ISIN. The Digital Token Identifier (DTI) sits at a lower layer than the level required for blockchain, smart contracts, and tokenized instruments.

What holds the hierarchy together is the mapping between its layers, and that is work GLEIF is actively doing. We are collaborating with ANNA on the LEI-to-ISIN mapping because every instrument identified by an ISIN is issued by a legal entity that, in turn, needs to be identified. We are in the same dialogue with the Digital Token Identifier Foundation, because tokens are also issued by legal entities. Each mapping connects an instrument or a token back to the organization behind it. That allows transparency and operational efficiency to carry across the traditional and digital asset environments.

The value is in the data behind the identifier

It is also important to understand that an identifier on its own is a string of characters. Its value comes from the standardized, governed reference data attached to it.

For instance, behind every LEI sits a structured set of reference data about the legal entity: who it is, where it is registered, and how it connects to other entities. That data is consistent for any entity, anywhere. Applied through a standardized framework, that information turns a code into something a market can act on.

This is why the LEI is well placed as a first layer of interoperability between traditional and digital finance. Organizational identity underpins everything else: managing risk, meeting regulatory obligations, assessing counterparties, and analyzing supply chains all begin with knowing which legal entity is involved. Whatever the technology, that need does not go away. Legal entity data is the legal foundation of commerce, business, and finance. The verifiable LEI (vLEI) extends that foundation into digital interactions, allowing the entity behind an action and the people acting on its behalf to be verified computationally. The technology around digital assets will keep changing. The need to know which organization stands behind a transaction will not.

Interoperability, identity, and data in a digital world

Standards work best when they are invisible, absorbed into infrastructure, and taken for granted. But the convergence of traditional and digital finance will undoubtedly test them.

This was the focus of my latest Trust Talks conversation with Laura Stanley, Director of Entity Data and Symbology at LSEG and Vice Chair of the ANNA Board. Laura has spent close to two decades working on symbology and standards, from SEDOL and ISIN to the LEI. Her view is direct: the market does not need more identifiers. It needs the ones it has to evolve, connect, and keep pace with new use cases.

Listen to the full Trust Talks conversation with Laura Stanley for a closer look at why interoperability depends on connected standards, how the ISIN has stayed relevant for four decades, and what coexistence between traditional and decentralized finance will require of data infrastructure. Trust Talks is available across YouTube, Spotify, and Apple Podcasts: https://linktr.ee/TrustTalks.

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