2017年-SWIFT环球同业银行金融电讯_Blockchain_–_utopia_or_reality__3页_124kb

Blockchain in the Cash and Securities Settlement Space: Utopia or Reality?

Core Content

Blockchain technology has been proposed as a transformative solution for the cash and securities settlement industry, aiming to reduce the costs of reconciliation between multiple counterparties by enabling a shared, distributed ledger. However, its adoption faces significant challenges, including technological immaturity, existing infrastructure investments, and the need for central bank integration.

Main Points

1. Blockchain's Promise and Potential

• Elimination of Intermediaries: Blockchain could reduce the number of intermediaries in the settlement process, potentially saving substantial costs.
• Disintermediation: The ability to issue and trade securities without the need for traditional exchanges or central banks is a key advantage.
• Efficiency Gains: Initial Coin Offerings (ICOs) have demonstrated the feasibility of blockchain in value exchange, raising over $3 billion in 2017 alone.

2. Challenges to Adoption

• Speed and Capacity: Current blockchain networks lack the speed and capacity to handle large volumes of transactions, such as a million per minute, which is essential for replacing traditional systems.
• Liquidity Concerns: Gross real-time settlement on blockchain would consume more liquidity than net settlement systems, making it less competitive.
• Transition Complexity: Moving from legacy systems to blockchain would require parallel systems, leading to increased costs and inefficiencies until full migration.

3. Central Bank Involvement

• Need for Fiat Integration: Blockchain systems require representation of fiat currencies to support real-world value exchanges. This has led to initiatives like "utility settlement coins" (USCs).
• ECB and Bank of Canada Experiments: Both central banks have conducted experiments with blockchain, such as STELLA (ECB and Bank of Japan) and Project Jasper (Bank of Canada and Payments Canada).
• Privacy and Security Issues: While DLT offers some security, encrypted transaction chains can be reverse-engineered. Solutions like Corda address these issues but introduce a more centralized structure than expected.

4. Industry Perspective

• Slow Adoption: Industry experts like Tom Casteleyn and Alexis Francis Thompson believe the transition will be gradual, not immediate.
• Operational Readiness: The industry is not operationally ready for instant settlement, which is a core feature of blockchain.
• Client-Centric Approach: Thompson emphasized that blockchain adoption should be driven by client needs and the desire to eliminate unnecessary middlemen.

5. Opportunities for Change

• Internal Transformation: Casteleyn argued that the industry should adapt from within, using blockchain to create new asset classes and improve internal processes.
• Agile Development: Singer suggested that blockchain allows for more agile and iterative project management, moving away from traditional waterfall models.

Key Information

• Monica Singer (Consensys): Strongly believes blockchain will revolutionize the industry faster than expected. She highlights the success of ICOs in demonstrating blockchain's viability.
• Tom Casteleyn (BNY Mellon): Cautious about blockchain replacing existing systems. He emphasizes the need for gradual implementation and the importance of central bank involvement.
• Andrew McCormack (Payments Canada): Highlights the value of central bank-backed digital currencies and the lessons learned from Project Jasper.
• Dirk Bullman (ECB): Acknowledges blockchain's potential but notes that it is not yet mature enough for large-scale implementation. He criticizes USC as "commercial bank money."
• Project Jasper and STELLA: These experiments tested the feasibility of using blockchain for central bank money and cash payments, respectively, showing promise but also limitations.

Conclusion

While blockchain holds significant potential to transform the cash and securities settlement space, its full realization is constrained by technological limitations, the cost of transition, and the need for central bank integration. The industry is likely to evolve from within, leveraging blockchain to improve efficiency and create new services, rather than being disrupted from the outside.