Blockchain, the public decentralised ledger technology behind Bitcoin, is gaining attention from a much wider audience within the financial services industry in terms of the potential application to securities clearing and settlements, payment processing and loan transactions.
Regulators Comments on Blockchain
In a recent speech to the Harvard Law School SEC Commissioner Kara Stein commented that the transparency blockchain offers in transactions could revolutionise regulators’ approach to monitoring systemic risk and oversight of the industry.
Australia’s ASIC and IOSCO Chair Greg Medcraft has also commented on four ways that blockchain has the potential to transform capital markets:
- efficiency and speed
- eliminating the need for trusted third-party intermediaries
- reducing transaction costs
- improving market access.
Other Applications for Blockchain Appearing
The U.S. stock exchange NASDAQ has launched a pilot program which uses blockchain to effect transactions in the NASDAQ Private Market. Blockchain removes the requirement to use a clearing house and is expected to decrease costs and settlement times.
Money transfer businesses such as Bitspark in Hong Kong and CoinPip in Singapore are already using blockchain to send money to other countries.
New startups are continually appearing with different uses for blockchain.
See Commissioner Kara Stein’s speech here.
See Greg Medcraft’s speech here.