The lack of harmonization in the regulatory treatment of Bitcoin has left a bad taste in the mouth of the financial industry, but blockchain the virtual currencys distributed-ledger architecture has only whetted the industrys appetite.
In the last few months, news reports have focused on the promise of blockchain, and several big names have signed on to the new architecture, which was designed to transfer bitcoins from one person or entity to another. Now, financial firms and technology companies are seeing a path to settle and clear trades in a more efficient way.
If you believe the general blockchain hype, you would believe that the technology is here, it's ready, and that the whole industry is either using it or about to use it, said Rob Palatnick, a managing director and chief technology architect at the Depository Trust & Clearing Corp. (DTCC). None of that is true. It's probably a number of years away to use in a significant manner in the industry infrastructure.
That has not stopped the industry from reading a number of recent blockchain-related contract wins and industry-initiative milestones as proof that the new technology is on the rise. In late January, the financial blockchain consortium R3 CEV announced that Barclays, BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Royal Bank of Scotland, TD Bank, UBS, UniCredit and Wells Fargo had connected to a private peer-to-peer distributed-ledger network managed by R3 and hosted in Microsofts Azure cloud-computing platform.
According to Richard Johnson, vice president of technology and market structure at industry-analysis firm Greenwich Associates. I think that 2016 is going to be a year where we have more proofs of concepts where the players are learning a lot more, he said. And by 2017, well have some real products out there.
