Blockchain Needs “MP3” Time To Overcome Products: Industry Experts -by Ecork

Blockchain, or distributed blockchain technology (DLT), supports crypto assets like bitcoin.


Blockchain needs its own ‘MP3’ time music company as the sharing process and technology hinder the development of a digital security company that could help fully realize its potential, industry officials said.

Blockchain, or distributed technology (DLT), supports crypto assets such as bitcoin and allows multiple groups to access a single piece of data at the same time.

But expanding its application to distribution, trading and resolving securities as stocks and bonds requires a common digital format for securities itself, says Gerd Hartung, head of new digital markets at Deutsche Boerse.

“The real topic is how to reach the digital format of the MP3 you see in the music industry. The next step we enter is the digitization of the financial instrument itself,” he said.

The digital MP3 file format, with its audio quality, did not seem to be a disruptive technology until the advent of MP3 players and streaming programs changed the wonder of the music industry, eliminating the killing of mid-men and almost are all barriers to entry facing. artist.

The similar pivot in financial markets will allow applications to be delivered in hours rather than days or weeks, better marketplace specific products and have the advantage of quiet windows to reach more investors more quickly and without data errors, company officials said.

But it will also address the position of banks in the revenue chain for issuance and securities securities.

A further step from a dedicated project to live markets came this week with the launch of LedgerEdge, described as the first, DLT company bond platform.

“Everyone is looking for greater information on the definition of digital assets,” said David Nicol, executive director and co-founder of LedgerEdge.

But with so many elements yet to fall into the world, Arjun Jayaram, founder and CEO of blockchain company Baton Systems, warns that it is unlikely to be a “big bang” moment.

Banks also use “very old” technology, which makes it difficult to deal with DLT platforms, he said, while Javier Hernani, head of security services at SIX which manages stock exchanges Zurich and Madrid, say that hook up to the blockchain is a necessary consideration. to be in charge.

Hernani also pointed to the need for digital versions of currencies such as the dollar, euro or sterling to speed up payments and achieve full benefits of DLT, something central banks should not have to decide on, is so only launch.

Instead “Bridge” will need to allow digital assets to trade, but pay for fiat currencies, he suggested.

The regulators also need time to agree with the new technology, with the European Union and Britain preparing to test DLT in market infrastructure.

“We intend to have this and work on it next year, and if it teaches us that we need to update the relevant legislation, then we will do just that,” said John Glen, Britain’s finance minister. in a statement last month.

The EU says its driving government will allow policymakers to identify obstacles in the process.

Comparative systems

HSBC and Wells Fargo are already using blockchain from Baton Systems to resolve bilateral foreign currency trading, and in July Deutsche Boerse will use its digital central register to provide same-day issuance and document processing for digitized certificates and warranties in its Clearstream distribution.

“We’ve proven the concept in the past, but now it’s true about real estate, full-time, digital product infrastructure in the field, and it needs to be productive and scalable,” Hartung said. tell.

Rival Euroclear has joined blockchain Consortium Fnality – sponsored by banks including Santander, Barclays, Credit Suisse, MUFG and UBS – which aims to open a payment account for tokenised assets at the Bank of England in October.

Meanwhile, US Depository Trust & Clearing Corp’s platform that leverages DLT is heading to a development stage for the same day decision of securities transactions, compared with the current two days.

Consultants estimate a maximum savings of 50% from blockchain use in areas such as distribution, primarily by cutting time consuming ‘mediation’ or repairing corrections in transaction data.

Completing trades faster also means less risk and therefore less capital attached in supporting trades.

Looking at the derivative market, Deloitte calculated “a distributed version of business data” could reduce costs by a third.

Combining DLT with an automated reading machine for how to manage derivatives and trade could cut the cost base for derivative traders by $ 3.2 billion, he said.

SIX, which launched a digital contract in November, is feeling the pinch this year.

“We are moving from a proof of concept to the real world, slowly,” said Hernani of the company.

“We will continue to see some real trade, but still in small numbers. I think there will be similar systems for a while.”

(This story has not been edited by an NDTV staff and is automatically generated from an integrated feed.)

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