Blockchain and the post-trade infrastructure


To be held on Monday, June 20, 2016


Speakers

  • Rob Palatnick  (chief technology officer, DTCC)

  • Prof Alistair Milne (Loughborough University)

  • Thorsten Peisl (RISE Financial Technologies)

  • Peter Randall (CEO, SETL)

  • Ajit Tripathi (PwC)



Discussion Points

 

What should we be talking about at this round-table?
Email your suggestions for the agenda to Harry Atkinson

There are two views of the blockchain – or, rather, of the distributed ledger technology that has come to be known as the blockchain. First, the skeptical one: that it is a very nifty intellectual construct with limited real-world potential. In other words, a technology solution in search of a problem. And, second, that it is a radical breakthrough that will revolutionise any activity that involves multiple commitments by different parties in different locations, where the integrity of those commitments must not be in question.

When you think about it, the world of clearing and settlement, of central counterparties, of depository institutions etc ought to be a perfect testing ground – and it is, therefore, no surprise that two of the most influential agencies in that space have recently been giving some bathtime thinking to the blockchain.

At the beginning of this year, the New York-based DTCC produced a rather splendid report entitled “Embracing Disruption: Tapping the potential of distributed-ledgers to improve the post-trade landscape”. My reading of this report is that it concludes that the blockchain can indeed do what its advocates claim – but that, at the moment, it isn’t really offering a great deal more than conventional technology can offer. And there are some drawbacks.

The principal author of this report is Rob Palatnick, CTO at the DTCC, and I am delighted that he has agreed to outline his findings, and to talk more generally about blockchain developments.

He won’t, however, get things all his own way. I am delighted that Alistair Milne, professor of financial economics at Loughborough University, has agreed to join the panel. Alistair recently co-authored (with Michael Mainelli) an important paper for the SWIFT Institute. Entitled “The Impact and Potential of the Blockchain on the Securities Transaction Lifecycle”, the report is based on interviews with post-trade professionals and highlights the governance and business model, as well as technical, questions that blockchain must confront.

And then there are Thorsten Peisl, CEO at RISE Financial Technology, and Peter Randall, CEO at Setl, both of whom have been deeply involved in commercialising the blockchain. Perhaps more than the other speakers, they are evangelists for the technology.

To wrap everything up, we have Ajit Tripathi, PwC FinTech Director and co-founder of the PwC UK Blockchain and Smart Contracts practice.

I concede that there is a lot of puff and fluff about the blockchain – and quite a lot of “peak jargon” obfuscation. But it is important – and it is important that we understand both its potential and its limitations.