The hype that surrounds Blockchain DLT is proving to be both a benefit and a risk for financial services firms. It’s great that the media hype has created so much interest and an ever increasing array of ideas on use cases, but there is a big but!
The hype can lead to confusion and inaction to begin projects and implement use cases. Even the use cases have contributed to the hype, where start up vendors and even mature financial institutions are giving the impression that Blockchain DLT will change the markets tomorrow. Blockchain is at a very early stage noted Eric Benz, COO and cofounder of CREDITS a blockchain platform vendor, at the recent ISITC Europe, Blockchain Working Group meeting. It is almost embryonic one could say, as use cases have not yet been transformed into business implementation.
Benz also made a very valid point that Blockchain Distributed Ledger Technology (DLT) is really just software and not as scary as some are making out. Blochainier as he rather quaintly called it has given the financial markets problems. The problems will get addressed in time. What is required is time, and a greater knowledge and understanding of Blockchain DLT. This knowledge should include a method for sorting out which Blockchain DLT solution provider, can do what, versus other providers. For example, CREDITS and Ripple! What is the difference? There are an ever increasing array of vendors with use cases. but how can a financial services firm evaluate their technical and operational capability.
It is with this in mind that ISITC Europe and co-chair of the ISITC Blockchain DLT Working Group, Scott Riley, along with Dr Hermann Rapp of Block Asset Technologies, are creating a standards framework to assist firms to make good sound decisions. The framework should eventually distil into benchmark tests All this will increase the knowledge and understanding of the financial markets
Standards are not unique to Financial Markets and its very likely that this standards framework will extend into other industries, providing an interlocking generic relevance of the technology. This of course will take time to organise and produce results, but it’s work that is well worth the investment and could save firms a considerable amount of money in the future.