It is an exciting time for blockchain technology. The transition from the early 2010s “anti-bank” narrative of Bitcoin to the current “blockchain as the plumbing of financial institutions” has changed everything. Now we are welcoming regulations in the space because it provides confidence to innovate. The space is maturing.
“I think there’s a few factors to it,” said David Palmer, Chief Product Officer and Co-founder of Pairpoint by Vodafone, when asked how the landscape has changed.
“I think one of them is that the technology is becoming more trusted and mature, so you have public permissioned chains, you have a lot of emphasis on privacy on-chain, and the security is a lot better, right? So I think that has helped to bring a lot of the banks and enterprises there,” he said.
“Now we’ve got this great use case for stablecoins. We’ve got this great use case for real-world asset tokenization. So you’re now starting to see that blockchains have use cases which are of interest to enterprises and of interest to banks,” Palmer added.
Marochini is a big advocate for blockchain in finance and travels worldwide to share the success of Standard Chartered’s progress in the space, encouraging other big banks to get on board.
“Digital assets are here to stay. Whether we are speaking about cryptocurrency for digital asset custody or whether we are speaking about tokenization of assets,” he said.
“We try to be present in each of the core pillars. Access, tokenization, custody, execution, and interoperability. That means that in each part of the value chain we want to be active and more active as possible to create the foundation for a future world which will be potentially tokenized,” Marochini added.
While forward-thinking banks such as Standard Chartered are making tangible progress with blockchain, adopting new technology and integrating it with legacy systems does not come without challenges.
“The bigger enterprises are machines for optimizing their existing business model,” pointed out Igor Mikhalev, Emerging Technologies and Innovation Strategy Leader at EY.
“If you are an optimizer of an existing process, you are unlikely to be flexible enough to be able to keep up with newcomers. So that’s the main challenge, rigidity of thinking and complacency,” he said.
“It’s a new technology, so we’re just waiting on the technology to catch up to legacy,” added Kelroy James, Supply Chain Manager – Defense Innovation Champions Network for Royal Navy.
“We have a lot of legacy archaic systems, they are all separate, they don’t speak to each other. That’s one of the problems. It’s happening in government and organizations,” he said.
“If you think about an enterprise resource planning system in a company, it’s all siloed, it’s not integrated. So, in terms of introducing blockchain, blockchain by itself, it’s not the solution,” he advised.
Marochini agreed we won’t be seeing an overnight swap to blockchain-native systems; rather, it will be a progressive integration.
“There is the challenge of interoperability, so there will be a transition. It will take a long time, but they will still continue to collaborate together between legacy system and the digital platform,” he said.
Another challenge is around data privacy and concerns about using public or permissionless blockchains. The historical solution has been to use private or permissioned blockchains to maintain data privacy, but then we create silos, defeating the whole purpose of using blockchain in the first place. Now that the technology has matured, we can have the best of both worlds.
“Blockchains and what Midnight are trying to do is bring permissions to blockchain, which introduces privacy, so confidentiality around the asset and the movement of the assets, but with a proof and immutability that blockchains require, but also at the same time introduce concept of identity and disclosures,” revealed Fahmi Syed, President of Midnight.
“So it enables, within a permissionless blockchain, to allow siloed networks to come and interoperate, but also to create permissioned enclaves within that permissionless network,” he explained.
Thanks to the combination of mature tech and regulatory clarity, the time has come for enterprises to start integrating blockchain into their systems. Now that we can guarantee privacy, scalability, and security with public blockchains, the full potential of blockchain tech can finally be realized, and we are on our way to a digital revolution across all industries.
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Source: https://coingeek.com/from-anti-bank-to-enterprise-adoption-blockchain-hits-mainstream-video/
