In early August, the World Economic Forum (WEF) published two excellent reports: A Blueprint for Digital Identity, - which I wrote about a few weeks ago, - and The future of financial infrastructure: An ambitious look at how blockchain can reshape financial services, - which I’d now like to discuss.
“Distributed ledger technology (DLT), more commonly called blockchain, has captured the imaginations, and wallets, of the financial services ecosystem,” notes the report, citing a few statistics as evidence: over 90 central banks are engaged in DLT discussions around the world; more than 24 countries have already launched blockchain-based initiatives; 80% of banks predict that they’ll launch blockchain projects by 2017; over 90 financial and technology companies have already joined blockchain consortia; over the past 3 years; more than 2,500 patents have been filed; and $1.4 billion has been invested in blockchain-based startups over the same time span.
In addition, a panel of global experts convened by the WEF selected blockchain as one of the Top Ten Emerging Technologies for 2016 because of its potential to fundamentally change the way markets and governments work, - further evidence that blockchain is reaching a tipping point of market acceptance.
But, significant hurdles must be overcome before the advent of large-scale blockchain infrastructures. The WEF correctly warns that this will take time. Not only are there major technology and standards issues to be worked out, but the industry will have to collaborate with governments around the world to develop the appropriate legal frameworks and regulatory environments.