Blockchain, the technology behind Bitcoin, is among the most disruptive technologies today, hence it is no doubt that the technology is among the hottest topics in the financial markets where it will be likely to disrupt the most.
With the rapidly increasing number of start-ups, big corporates as well as governments have started to embrace the technology, blockchain appears to penetrate deeply in the discussions of the financial crowd. The Sentifi tool is able to show where blockchain is shining since its exposure with related topics is intensely discussed on the news, blogs and social media. If you are a financial market participant interested in blockchain technology, this might be a good updated overview for you.
IBM is the most talked-about company in terms of blockchain with its heavy investment in the technology. Last month, the U.S.-based company released a new service that combines blockchain and cloud technology, aiming to help companies make use of blockchain technology in a secure environment.
Jerry Coumo, IBM’s VP of Blockchain Technologies, said on the company’s blog that IBM had a vision that blockchain technology will become an essential tool for businesses, governments and society. “We need to create a new social compact, where business, with input from government, architects the future of financial services. We at IBM look forward to working with our partners in government, industry and academia to get this done.”
Goldman Sachs is heavily discussed together with blockchain since the company seems to aggressively show that it is a blockchain backer. Last week, Goldman Sachs published a research report on blockchain. The report addressed seven potential practices of blockchain technology in the real world. These include:
- Build trust in the Sharing Economy through helping individuals to validate their identity and manage their reputation.
- Decentralize energy marketplace in the U.S. electricity industry by smoothing the way for transactions and security among parties
- Reshape the title insurance industry and lower transactional risk
- Help capital markets save $2 billion in the U.S. and $6 billion globally a year through streamlining the clearing and settlement of cash securities
- Make the repo clearing process more efficient
- Save a total cost of nearly $300 million in leveraged loan trading by streamlining reducing settlement period
- Transform anti-money laundering (AML) and know-your-customer (KYC) compliance through reducing the false positive rate in transaction surveillance and streamlining the KYC process
Goldman Sachs is also a member of the major R3 blockchain consortium. R3 is a New York-based blockchain technology company focusing on researching and developing blockchain applications in the financial system.
In the U.K., the government has shown its interest in implementing blockchain technology. Minister for the Cabinet Office Matt Hancock admits that the government cannot ignore the advance in technology and that blockchain can serve as a tool to transform government’s operations. He said: “Blockchains ‒ distributed ledgers, shared ledgers ‒ are digital tools for building trust in data.” The British government considers using blockchain as a method of student loan distribution.
The U.K. government’s interest in blockchain is also demonstrated in a £250,000 grant to help the finance international transfer platform Tramonex through Innovate UK to develop a cross-border payments tool using Ethereum, a public blockchain platform.
The Sydney Stock Exchange is reported to build a blockchain settlement system with an aim to set up a new market which targets venture capital funds and commodities markets at a lower cost than the Australian Securities Exchange.
The project is set to complete by 2018 and will be a public distributed pledger. Once the system is ready, it is expected to reduce collateral risk, increase trade velocity, grant brokers and market participants with more control and save them money.
New York has become the first state in the U.S. to authorize Ethereum, Bitcoin’s rival, as a new virtual exchange. Gemini Trust has received the approval from the New York State Department of Financial Services for American cryptocurrency investors and traders to start buying and selling the new virtual currency.
This move is regarded as continuing the state’s long condition as a pioneer in innovations and emerging industries, according to New York Governor Andrew Coumo.
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