Ter the News: APRIL Four, 2018
CoinDesk – by Pete Rizzo
While distributed ledgers were merienda considered a way for financial firms to upgrade back-office processes, some show up to be switching their tune on the tech.
At the World Exchange Congress te Budapest this week, representatives from entero exchanges met to discuss market issues, with speakers including representatives from the Central Bankgebouw of Hungary, CME Europe and the multiplicity of regional operations that power completo trading.
Blockchain, while not high on the memorándum, wasgoed a frequent topic of conversation and confusion among attendees, with some making antsy pitches for the technology and others balking at its tremendous hype.
Still, te side presentations and roundtables, there emerged the idea that distributed ledger tech is perhaps ill-suited for use cases that would spur cost savings, and that exchanges should consider it very first spil a way to explore fresh market opportunities.
Ted Pendleton, senior vice voorzitter at blockchain solution provider AlphaPoint, wasn’t bashful about promoting this view. He argued ter his presentation that revenue-generating opportunities are the best way for organizations to not only test, but build up from the technology.
Pendleton told attendees: ",I’ll be very blunt about this, it’s ideally acceptable to use blockchain ter over-the-counter derivatives, but I think there are swifter opportunities.",
Pendleton went on to explain how an exchange could use blockchain to open a market that digitized the trading of a fresh asset, such spil the chemical factor lithium, a market he projected spil an chance worth up to $30m.
",Very much like the physical world, you’re able to gather together producers te a single chain and begin generating revenue,", he continued.
On stage, there wasgoed a similar agreement.
Cees Vermaas, CEO of CME Europe, didn’t mention blockchain directly, but alluded to his rock-hard’s work with the technology ter a keynote speech that addressed how the commodities giant is approaching digitization and included mention of its ongoing pilot with the UK’s Royal Mint.
",This is one of the reasons why at CME Group wij are working with the Royal Mint on digitizing gold. The right level of dialogue and technologies can minimizes risk and cost will maximizing workable innovation,", Vermaas said.
Other representatives that discussed blockchain included David Janczewski, head of strategic marketing at the Royal Mint, Sergey Putyatinskiy, CIO at the National Settlement Depository, and Losbreken COO David Ripley.
Elsewhere, a blockchain roundtable discussion hosted by US tech consulting hard EPAM spotted heated discussion on the direction of the technology.
There, Balazs Fejes, an SVP at the rock hard, outlined five use cases he believes exchanges should consider, including settlement, over-the-counter trading and proxy voting. Yet, the idea thesis existing processes could be optimized by the tech wasgoed challenged by vocal and outspoken participants.
Sergei Poliakoff, CIO at Moscow Exchange, for example, argued that exchanges should be looking to blockchain spil a way to ",pauze their own business prototype",, questioning its use spil a ",complicated distributed database", at all.
Instead, he argued exchanges would be best advised to pursue fresh markets such spil crowdfunding, energy trading and property trading.
",Wij should look for transactions that have never had central counterparties, where the core finance built on the verslaggever relation is untouched by any of this,", he said.
Ter this light, Fejes made the case for loyalty points spil an example of a market that could benefit from fresh exchange services powered by distributed ledger tech.
Still, there were signs that the idea that back-office processes would be disrupted by the tech isn’t going away entirely.
Indeed, the potential influence of a unified blockchain that resembles the internet te its scope and ease of access wasgoed perhaps most visible ter sessions that didn’t address the tech at all.
For example, a panel on challenges te the African exchange market spotted discussion on how regional exchanges suffer from poor liquidity, but have also bot incapable to unite their order books despite attempts overheen the years.
Elsewhere, challenges te opening access to less trafficked integral exchanges wasgoed introduced ter a panel on ‘market classifications’. There, index providers and emerging markets shed light on the ingewikkeld process by which exchanges are graded and ranked for investors.
Pendleton, too, spoke to the discrepancy te technologies inbetween developing and developed markets spil an example of the path forward for blockchain te the back office.
",Wij all live ter the película del Oeste world, where the response is, ‘Don’t touch my billion dollar database’,", he said. ",Other markets are commencing fresh.",
Others argued that the upgrade to such systems wasgoed necessary to reduce the risk to the integral financial system spil a entire, one that faces fresh cyberthreats.
Despite his skepticism on database use cases, Poliakoff made perhaps the most impassioned pitch for blockchain’s benefits te remarks that showcase how a long-term vision is still powering exploration of the tech.
",Cybersecurity will be the thickest driver. Cyberthreat is not a threat anymore, it’s a War on Drugs or War on Terrorism,", he said, adding:
",The only way to live with that is to distribute trascendental portions of our infrastructure. I think that’s the thickest shove for DLT.",