Blockchain is not a new technology; it has been available since the introduction of bitcoin in 2008. However, alternative applications in financial services have not yet achieved a critical mass of acceptance. There are some reasons for this, including the following.
- There is currently no legal framework that regulates the application of blockchain technology for processing financial transactions. What’s still missing is a stronger focus on governance principles and the network effect necessary to deliver the true benefit of blockchain-type or distributed ledger architectures.
- There is now a growing focus on security and other risk issues from regulators. It is expected that regulators will increasingly discuss and operate in collaboration with the industry to reach the best regulatory solutions for all parties involved. This will take time.