Page 14 - February 2018 Disruption Report Flip Book

THE FUTURE FINANCIAL INFRASTRUCTURE FJEABNRUUAARRYY 22001188
Significant hurdles must be overcome before the advent of large-scale blockchain structures can be integrated into the financial system’s plumbing. The hurdles include scalability concerns, lack of standards, operational risk of incorporating blockchain onto legacy systems, costs of incorporating blockchain onto legacy systems, lack of interoperability between blockchain providers, and cyber- security issues. Major technology and standards issues will need to be resolved. In addition,
the financial services industry will need to collaborate with governments around the world to develop the appropriate legal frameworks and regulatory environments to facilitate the integration of blockchain technology. (USC Anneberg Innovation Lab, Irving Wladawsky-Berger, 09/19/16; Blockchain and T2S: A Potential Disruptor, Standard Chartered, 06/16/16)
In the Global Blockchain Benchmarking Study, Dr. Garrick Hileman and Michel Rauch provide an overview of the current state of enterprise and public sector use of blockchain and distributed ledger technology (DLT). The authors concluded:
Significant growth of the enterprise DLT ecosystem:
• At least 115 DLT start-ups employing more than 2,000 people are active in the ecosystem, in addition to large established corporations that increasingly set up entire business units and research labs exclusively dedicated to DLT.
• The protocol layer is slowly maturing: several dozen start-ups
and established corporations are building and improving the core infrastructure (protocol frameworks, core building blocks), but ‘immature technology’ is still considered one of the key challenges to broader DLT adoption.
• Only limited network and application deployment to date: the vast majority of users are experimenting with small-scale, isolated networks; live applications are mostly built as ‘permissioned layers’ on public blockchains.
• Majority of use cases focus on financial services: the majority of enterprise DLT companies are targeting financial and insurance- related use cases and actors, but increasing attention is being given to non-monetary applications (e.g., identity, supply chain, intellectual property).
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