Goldman Sachs co-head of technology, Don Duet, recently discussed the applicability of blockchain technology for banking y in a podcast from the investment bank titled “The Digitization of Finance.”
Duet the idea of implementing blockchains for bank back office infrastructure:
The ability to have a technological solution that enables multiple counterparts to see and enact upon the same understanding of truth on an asset transfer in a way that’s immutable, that’s protected, that uses cryptology to make sure that you can’t go back and change something inappropriately creates a new way to envision the way that we do many parts of the financial industry.
Duet believes that the application of the technology could make banking processes more efficient, cutting costs and saving time.
However, as the DTCC noted in a recently released white paper, this still does not mean the solution could not be centralized. Other proponents of ledger technology, like the Ripple team that believes “decentralized systems are inherently less efficient”, concur with this.
For Duet though, it is more important that the blockchain revolution is provoking discussions on designing better technological solutions for the financial sector:
You could ask the question, ‘Why couldn’t this have been designed before?’ And that’s a very valid question. What I find personally very exciting about this is just the awareness that is happening within the financial community that there is a technological answer that can drive change and improve our system.
Goldman Sachs is one of the banking members of the R3 consortium that is developing blockchain standards for financial services. In November 2015, the investment bank filed a patent application on using cryptocurrencies for securities settlements, called the SETLcoin patent. Goldman Sachs in April 2015 co-led a $50 million investment round in bitcoin startup Circle Internet.