Sunny optimism faced off with hard-nosed pragmatism during an early Sibos session on blockchain in the cash and securities settlement space, as ConsenSys rep Monica Singer tried desperately to win over cynical bankers.
Singer - no hoody-wearing Silicon Valley teenager but an FS industry veteran – had her work cut out as the blockchain evangelist on a panel comprising representatives from BBVA, BNY Mellon, the European Central Bank and Payments Canada.
Explaining the appeal of DLT over traditional alternatives, she claimed: “Once you see what a car looks like, you don’t want a horse.”
But BBVA’s Alexis Francis Thomson was not convinced. For him, and his colleagues on the panel, blockchain technology may well be able to offer improvements in settlement speeds but he questioned whether the desire for this is really there, pointing out that the industry in Europe has just gone through a painful, long and expensive process of moving to T+2.
In other words, if you’ve just spent a fortune on a thoroughbred do you really want to send it to the knacker’s yard and buy that interesting, shiny but untested new car?
The bankers on the panel all expressed optimism about blockchain’s long-term potential and their concerns were not about the technology itself.
Following testing with the Bank of Japan, the ECB recently concluded that DLT is not mature enough for large-scale applications like real-time gross settlement (RTGS) systems.
Bullmann told the audience that while from a technical perspective the testing had gone well, DLT is not ready for “prime time”. This is in part because before they hit the real world, systems need to jump political and regulatory hurdles. This could be explored in the next stage of ‘Project Stella’.
For BNY Mellon’s Tom Casteleyn, adoption is the biggest barrier because, until you move everything over to blockchain, you have two systems running and two sets of associated costs.
But the warnings about banking’s slow, complex, conservative nature failed to dim Singer’s enthusiasm, who insisted that blockchain is going to “change the world much faster than people think”.