While major financial institutions are investing more time and resources in investigating the potential benefits offered by blockchain technology, the key question for many is not whether to look into the technology, but how.
Recently, this question has been gaining new definition as institutions seek to grapple with the more complex implications of using blockchains and distributed ledgers for real-world use cases. For example, it remains to be seen whether the use of distributed ledgers will require the use of a digital asset, which at least for now bears regulatory uncertainties.
On the bitcoin blockchain, the longest-running iteration of the technology, the network’s distributed ledger tracks a native asset representing a digital currency. And while some global regulators have confirmed the use of these bits of data represent real value , others have yet to make any announcements. Such uncertainty is magnified by the rising interest in blockchain trials at major institutions, where private networks are being created with tokens representing everything from shares in companies to shareholder votes.
However, some institutions are choosing not to use blockchains with unique assets, instead leveraging cryptographic distributed ledgers as a way to ease the ability for participants to share information on existing transaction processes.
To Ed Budd, chief digital officer of global transaction banking at Deutsche Bank , this question is less an either/or proposition but evidence that financial institutions are becoming more discerning when applying the technology to real-world business problems.
Budd told CoinDesk: "The degree of the efficiency you can get – it’s asset class specific. Some asset classes are mostly electronic today. But, there are many asset classes today that aren’t. The weight of the benefit is different by asset class." Budd said he doesn’t believe there is one version of the technology that will prove to be a silver-bullet solution, saying that […]
