Jeffrey Billingham is vice president in Markit’s processing division and a leader of the Chain Gang, Markit’s group implementing distributed ledger technology.
In this opinion piece, Billingham examines the challenge of developing a long-term framework for blockchain in financial services, while advocating the industry needs to be bold in its action to realize its potential. The financial industry began 2016 with a host of blockchain promises. While many of these promises show encouraging momentum, a clear implementation strategy remains elusive. If every bank, exchange, infrastructure provider and clearing house put their internal working groups in one room, all would agree to one point: blockchain technology is not a silver bullet for financial markets.
However, beyond defining what the technology isn’t , few seem to agree on what the technology actually is .
The financial industry has invested over $1bn in the last 14 months to support blockchain consortia, pilot programs, companies and other efforts to create consensus about implementing blockchain. This activity indicates a high level of interest, but is atypical of how innovative technology usually enters a market.
We would expect the industry to eschew consensus and exhibit bolder, unilateral moves in pursuit of competitive advantage. Moreover, if incumbent institutions were slow to move, we would expect blockchain startups to build new banks. Starting points
For now, neither of these expected scenarios are playing out in earnest. A cynic would say the focus on partnerships only shows that the players involved are hedging their bets. The eternal optimist would say that those players need to partner to be successful.
Nevertheless, there is merit to this collaborative approach. A blockchain isn’t simply software to install, but rather the foundation of a robust peer-to-peer network. We at Markit certainly appreciate the time and efforts necessary to build a successful network. And, to be […]
