One of the founders of trading venue Chi-X Europe is joining the race to bring “blockchain” technology, the system that tracks and identifies transactions in digital-currency bitcoin, to the wider financial world.

The objective is to allow people to transfer cash or make payments instantaneously without a bank or clearing party being involved, saving on transaction costs.

A venture called SETL, led by former Chi-X head Peter Randall and hedge-fund investor Anthony Culligan, said on Monday its blockchain-inspired technology would simultaneously transact real-world currencies or assets and provide a “golden record” of the trade, which takes days on some financial markets.

“We want to unlock the power of the blockchain for financial markets,” said Randall in an interview. The technology will be regulator-friendly and “permissioned”, meaning that participants’ identities can be derived by regulators and auditors if required, he said.

With the financial sector under pressure to cut costs and protect profits in the face of post-crisis rules and sluggish markets, investment is pouring into tech-driven approaches such as blockchain to overhaul processes that are costly to maintain.

While bitcoin has in the past been viewed with suspicion by many in the financial sector, the industry is now seeing potential from using the technology behind it.

Managing, clearing and settling trades costs the financial sector between $65 billion and $80 billion, according to SETL, citing figures from consultancy Oliver Wyman.

SETL’s network would work in the same way as the bitcoin blockchain, generated from each participant’s server. The ledger of transactions would be stored on these servers, with encryption, but regulators or auditors would be given access to identify the parties involved.

SETL is not alone. Firms across the finance and technology space have been ramping up efforts to tap the potential of blockchain in overhauling the payment and settlement of financial assets, which currently use central authorities and clearing-houses to track and guarantee transactions.

International Business Machines Corp has been in informal talks about a blockchain-tied cash system with a number of central banks, Reuters reported earlier this year, while Nasdaq OMX last month announced a partnership with blockchain infrastructure provider Chain.

Sceptics cite a number of obstacles to wider adoption of blockchain, a report by the Institute of International Finance found, saying the computational power and associated maintenance costs would become increasingly difficult to manage.

SETL’s Randall said the technology was in its infancy but was manageable in terms of complexity and the focus was on attracting investment with a “real-world” business plan.

(Editing by David Holmes and David Evans)

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