Blockchian technology yet to deliver promise in traditional financial sectors

Blockchian technology yet to deliver promise in traditional financial sectors

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Blockchain is a digital ledger that is used by cryptocurrencies like bitcoin to keep their record; and banks, exchange operators and other companies are trying finding uses of that digital technology to further enhance their efficiency as well as to better compete with the digital rivals that are increasingly gaining on the market share and in the process they came to be spending billions of dollars.

Last week, Reuters reviewed and shared its finding of the 33 projects announced over the past four years by different financial institution to make use of blockchain technology and its interviews with the industry executives who remained involved in that process. Reuters found that in order to deliver on its promise, the use of blockchian technology by traditional commercial institutions has yet to deliver.

Reuters categorized six test projects in three statuses to portray the actual picture of the technology’s progress in the sector.

In 2016, Deloitte and technology startup SETL said that they had tested a blockchain-based card payment system and announced that service could be launched as early as 2017, but Reuters categorized the project as “Not Active” as it has not launched, SETL President Peter Randall told Reuters.

Another “Not Active” project is of between IBM and MUFG Bank Ltd, also announced in 2016, to build blockchain-based system to manage contracts between two companies but it is no longer active, as said the companies.

In the status of “Pressing Forward”, Reuters categorized the project of Australian Securities Exchange to adopt blockchain technology replacing its equities clearing and settlement system in use for over 25 years. The project, announced in 2016, is expected to go live as planned in 2021, Chief Executive Dominic Stevens told Reuters in May.

A blockchian based trade information warehouse of the Depository Trust & Clearing Corporation is also expected to go live later this year, which place it in “Pressing Forward” category of Reuters.

American Association of Insurance Services (AAIS) and exchange settlement provider CLS remained successful launching their respective blockchain-based projects, according to the Reuters review.

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