This article was written by Dr. Jock Percy, CEO of Perseus Telecom .
For such a nascent technology, it is remarkable how quickly blockchain has become one of the hottest topics in the financial service industry. This looks set to continue into 2016 as firms race to test and, potentially, become early adopters of a technology that can drive a very powerful database or decentralised ledger.
The technology was originally developed to power the cryptocurrency Bitcoin, with each transaction logged in an encrypted block creating a permanent, secure digital record of every process. But the countless possible applications of such a product have led banks, exchanges, funds and even governments to invest in the development and testing of the technology for their own uses. The blockchain can also be used to record and validate any exchange of assets, such as bonds, currencies or commodities.
What makes this exciting are the tangible benefits to be had from speeding up transaction settlement time that currently takes days, increasing transparency and at the same time freeing up precious capital. Yet how realistic are these promised gains and how much of the buzz around blockchain is justified? Leaps and bounds
At the end of last year, Nasdaq came to the fore as one of the first major institutions to successfully use the technology to complete a transaction: in this case a share sale. The blockchain had created a full digital record of the whole process, which Nasdaq says significantly reduced the settlement time and eliminated the need for paper stock certificates. The exchange group developed its new Linq system based on this technology, in partnership with the blockchain specialist fintech firm Chain. Nasdaq began establishing a track record of digital currency and blockchain investments including their partnership with Noble Markets, a start-up blockchain based […]
