A survey of distributed ledger technology (DLT) professionals finds that nearly half are confident that global post-trade blockchain adoption will be widespread within the next three to five years.
The poll was conducted in October and November 2016 among members of the Post-Trade Distributed Ledger (PTDL) Group, which comprise global banks, custodians, central securities depositories (CSDs), clearing houses, exchanges, regulators, government agencies and central banks.
Of the 45 members polled, nearly half (48%) believe that blockchain will become adopted in the financial post-trade area in three to five years, while 29% of members are optimistic that it will be achieved in as little as one to two years, though 21% forecast it will take in excess of five years.
The survey of PTDL’s global membership found that the top three benefits of distributed ledger technology will be operational cost savings (cited by 81%), increased efficiency/ reduced settlement cycles (67%), and transparency (43%). In a reflection of the significance of the new technology, a fifth (20%) of respondents said that the strategic importance of blockchain within their own organisation was ‘very high’, with an additional 34% saying it was ‘high’; only 7% said it was a ‘low’ priority.
The organisation brings together major post-trade industry participants to share information and ideas about how DLT can transform the post-trade landscape. Its organising committee is made up of representatives from CME Group, Euroclear, HSBC, London Stock Exchange (LSE) Group and State Street.
Despite the compelling arguments for the adoption of blockchain, PTDL’s members warned that industry adoption remains the most significant barrier to implementing blockchain in a wider post trade industry context – this was cited by 78% of respondents.
Regulation (56%), a clear business need (55%), concerns around confidentiality (51%), and lack of standardisation (49%) complete the top five in terms of impediments. Lack of available talent is seen as the least significant concern (23%).
“The survey shows that blockchain could become mainstream in just a couple of years, with benefits such as better transparency, shorter settlement cycles and cost savings clearly identified by our members,” commented Jörn Tobias, managing director at State Street and PTDL Group representative.
“The big barrier to growth, however, is seen as caution: fears over adoption and hesitation about embracing what remains cutting-edge technology. This is a core focus for the PTDL Group – engaging with financial services firms, technology companies and other stakeholders and helping catalyse adoption across the world for the benefit of all parties the financial post-trade area.”
Domestic banks could feel the greatest impact from the trend, an East & Partners survey suggests.
The major oil producers have agreed a further reining-in of production in a bid to push the price higher.
The General Data Protection Regulation (GDPR) will be enacted on May 25 2018 and promises to revolutionise the way that firms collect, store, process and protect the personal information of customers, clients and employees.
Today sees the publication of set of global principles of good practice in the foreign exchange market.