Blockchain Summit 2016 in London saw an interesting mix of audience, from global banks and technology evangelists to solicitors and journalists, all bringing in their respective perspectives. It highlighted some of the key initiatives undertaken by the broader industry and interacting with some of the pioneers in the blockchain space. We had speakers from leading organizations such as SWIFT, Visa, HSBC, Barclays and some other boutique organizations - each bringing in their knowledge and perspective.
It was interesting to see SWIFT being an eager participant in the blockchain journey though most of us would think that blockchain is a direct competition to SWIFT - from a network perspective. After all, doesn't blockchain promise to reduce the cost per transaction between parties and isn't that SWIFT's revenue model? What was however refreshing to see was how keen organizations are to collaborate on this. For instance, SWIFT standards being the acceptable messaging formats across all blockchain networks is a great attempt to leverage the best that we have for a successful collaboration.
On the other hand, we saw banks like HSBC and Barclays taking on the hat of FinTech's that have setup specialized blockchain units focused on bringing new products to the market. HSBC has experimented with close to 50 use cases and is taking approximately 12 uses cases live in the near future. Barclays has collaborated with Wave and is gearing up towards being a leader in the blockchain space. The experimentation in most areas is open-source while blockchain-based approach is aimed at decentralizing and scaling the contemporary architectural designs. The experiments are even more relevant today because the pilot communities are already actively designing tools for collective engagement and decision making on baselining the key initiatives and principles which would have an effect on the overall industry engagement and way forward on blockchain.
What was also interesting to see was legal firms getting into the nuances of regulations and sharing their point of view and frameworks to govern the blockchain industry. This is a clear indication of the interest blockchain has generated and where we are headed.
One of the main points of discussion was also about the interoperability of blockchain networks and what standard technology to use for messaging and technology. There is no straight answer as yet but everybody agreed on the need of forming a uniform consortium to achieve high interoperability - which would form the basis of a sustainable blockchain initiative. Most widely discussed use cases - from a pilot perspective - are seen in the post trade settlement and Trade Finance areas. Boutique firms like KBC securities with their BOLERO product suite are clearly market leaders in the Trade Finance blockchain space. The event also highlighted strong focus on cross border payments as well, and clearly, the likes of Ripple are already creating a name for themselves in this area. However, banks are very keen to roll out their offerings in this space making it a clear ask for building consortiums and interoperable networks.
The consensus on blockchain use cases is expected to hit production range from Q4 2018 to Q4 2020, however a realistic time to hit production could be anywhere between early to late 2019. The necessary structural change and innovation required for this shift has started to happen, and the risk of the established hierarchical decision-making structure being an obstacle to such fundamental changes has started to diminish with new structures adapting to the speed of change.