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Money20/20 Panel: Integrating Blockchain Into Mainstream Business

Source: bitcoin

Money20/20 Panel: Integrating Blockchain Into Mainstream Business

On Sunday afternoon at the Money20/20 Conference in Las Vegas, a panel of industry experts discussed the exciting potential of blockchain applications and the array of solutions being developed to meet the needs of a wide number of players. Panelists urged the packed auditorium to take a serious look at the quickly evolving cryptocurrency technology space, and honed in on the need to lower settlement costs and times.

Also read: Money 20/20: BitPay Announces New Mobile App

Much like the internet of the early 1990’s, blockchain applications can potentially open up an entirely new ecosystem for digital project deployment. Financial services firms are increasingly aware of this opportunity and issue.

Money 20/20 Panel: Which Mainstream Firms Use the Blockchain?

Overstock.com is one organization taking a lead in this realm. Through trading their stock on a blockchain, settlement times are reduced to 10 minutes. Judd Bagley, director of communications at Overstock, pointed out the power of exponential change ushered into the financial services industry by blockchain technology:

“Most tech changes only affect point marginally. This isn’t a small matter of degree, this is orders of magnitude difference. A 90% reduction in cost.”

Such cost reductions make a real business case for blockchain technology to financial services providers such as payment processors looking to cut costs.

By 2017, Overstock will have established a beachhead for blockchain-based equities trading, but will in-turn need to convince others to join the t0 platform. Through eliminating counter-party risk in times of panic, such as the Great Recession in 2008, or the Flash Crash of 2010, opposing parties can leverage shared ledgers to ensure the accountability of an opposing party.

Emmanuel Aidoo, Director of Investment Banking Technology at Credit Suisse, pointed out how much capital is stifled by being locked up in the slow, overhead intensive traditional systems. Credit Suisse has a lot of legacy in these traditional systems, and needs to figure out how to merge with blockchain in the with existing cloud and internal IT solutions.

Many industry players’ hard work is beginning to pay off, as blockchain technology applications have moved towards launches and direct proofs of value. For example, IBM is using blockchain technology to show that transparency provided through a blockchain enables for quicker dispute resolution in for food quality intake tracking on Chinese supply chains.

Jacob Farber sampled things through pointing out that all blockchain application can move beyond Bitcoin towards pointed gateway applications to be implemented within financial systems.

“We went from Bitcoin, what’s that? To, Bitcoin,watch it,” Farber said. “And now, to an assumption now that blockchain technology will be deployed, it’s just about how and where.”

Initiatives such as the R3 consortium, made up of over 50 banks, large financial institutions now collaborating on massive scales to research the potential applications of blockchain technology.

So where are we in the hype cycle, you may ask? Yolanda Goettsch, Vice President and Associate General Council at NASDAQ  was rather optimistic.

Estonia, for one, is a leader in collaborating for instituting blockchain applications, as shareholder voting in a use case in the NASDAQ-operated region. NASDAQ’s Linq platform already enabled a successful trade of shares from Chain.com to a private group of investors last December. Through eliminating processes that are done manually, reconciliation costs are lowered as peer-to-peer, real time information on a distributed ledger can increase efficiencies for many parties.

Furthermore, according to Goettsch, two-thirds of banks are working on commercializing blockchain tech by 2019, with many proof of concepts will go into production within the next 2 years, may take 5-8 years.

The panel painted a rather optimistic future for adoption of blockchain technology. Large players are rightfully looking towards the technology to offer a competitive advantage, increase security, and scale with the experimental blockchain infrastructure in development. Exciting questions are additionally raised around crowdfunding projects and their relation to these initiatives.

What are your thoughts about the increased adoption of blockchain technology? Share your thoughts in the comments below!


Images courtesy of Ryan Strauss.

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Money20/20 Panel: Integrating Blockchain Into Mainstream Business

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ECB Executive Places Europe As Leader In Blockchain Technology

Source: bitcoin

ECB

The European Central Bank is engaged in “experimental work” on blockchain technology. As some banks have warned, the technology is still too new to know what real world uses it has. But, according to an ECB executive board member on Monday, the central bank is researching how the technology could apply to modern financial systems. 

Also Read: Bitcoin Prices Inches Towards $470. Will $500 Be Next? 

Member of the Executive Board of the ECB, Yves Merch, confirmed the ECB is investigating blockchain technology and how it could be adopted by the euro zone’s central banks.

ECB Believes Their Future Might Be Blockchained

“From a central bank perspective, in the context of our strategic reflections on the future of the Eurosystem’s market infrastructures, we are certainly open to new technologies and, like many market players, have launched some experimental work with DLT,” Mersch said. “It is clear that we have a lot of more thinking to do on DLT-related questions and their policy implications.”

He explains that the central bank is in the midst of researching possible technologies to change the future of central banking. Mersch said that blockchain technologies are “one of several possibilities” the central banking system could adopt. Blockchain-inspired technology could lead to “lower costs and a more resilient and legally sound market infrastructure.”

He cautioned: ”But even if, ultimately, DLT emerged as technically superior in terms of safety and efficiency, we will also have to reflect on the wider implications of the use of this technology for the role of central bank money.”

The blockchain technology became a focal point in 2015, overshadowing the Bitcoin technology which had been shrouded in controversy a la the bankrupt Bitcoin exchange, Mt. Gox, and darknet marketplace, Silk Road.

Currently, through partnerships like R3 CEV, some of the largest banks in the world are researching blockchain technology, in particular with Ethereum, an alternative blockchain from Bitcoin.

The Bank for International Settlements, and Santander bank, have posited that blockchain technology could make banking more efficient and less expensive. Many technologists say the blockchain has implications for industries outside of the financial industry.

“The possibility for financial intermediaries and market infrastructures to share a distributed ledger – i.e. a decentralised common database – is something unprecedented,” Mersch said. “It has the potential to advantage some actors, by lowering back-office costs and collateral or capital requirements. At the same time, it may possibly disintermediate or even make redundant some market actors that do not provide core functions.” He implies that a move to blockchain-inspired technology could mean central bank’s have their own, private crypto-currency on a private distributed ledger. 

Bringing our Eurosystem market infrastructures on DLT automatically means bringing central bank money on DLT,” he said. “This may have implications on the central bank functions which go beyond the operational and technical sphere. It is therefore important to structure the discussion along the lines of who could access the central bank ledger.”

He added: “It is clear that we have a lot of more thinking to do on DLT-related questions and their policy implications. Before wielding the hammer we have to make sure that we have a strong anvil.”

No Blockchain-Specific Regulations For Now

EU lawmakers decided recently they would not yet regulate blockchain technology. “We don’t want pre-emptive regulation, but we do want precautionary monitoring,” Jakob von Weizsaecker, a German center-left member of the European Parliament, informed Reuters.

The regulators claimed they did not want to stifle innovation in financial technology. “One reason why regulating now in detail would be difficult is that we don’t know yet what the most important use of blockchain might be,” von Weizsaecker said.

BitStamp’s history paints a portrait that regulators also believe they already have the regulations necessary to keep an eye on Bitcoin. That exchange recently received a license from Luxembourg to operate as a money transmitter. 

The report is not held as law. It requests the European Commission to monitor blockchain and fintech developments.

Andrew Hauser, BoE executive director for payments, said last week the authorities had to keep abreast of blockchain.

“Central banks can’t afford to be Ubered,”Andrew Hauser, BoE executive director for payments, Andrew Hauser quipped of the EU lawmakers to not spell out further details.

This, coupled by the European Central Bank and BitStamp’s transmission license, spells an optimistic future for blockchain technologies. Bitcoin could benefit from the good news in the general blockchain industry. A block reward halving in the not so distant future – July 10 more or less – the case is being made for a bullish second half for the digital currency.

What do you think about the ECB’s statements on blockchain technology? Let us know in the comments below!

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ECB Executive Places Europe As Leader In Blockchain Technology

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