PTDL Group Researches Viewpoints on Blockchain Technology
The Post Trade Distributed Ledger Group – ‘PTDL Group’ – made up of global banks, custodians, central securities depositories, clearing houses, exchanges, regulators, government agencies and central banks, has commissioned research amongst its members. Results show that almost half believe blockchain will become adopted in the financial post-trade area within three to five years, and over a quarter expect this to happen within the next one to two years. 50% see it as an opportunity, whereas only 10.5% think it will be a threat.
The survey of PTDL’s global membership found that the top three benefits of distributed ledger technology are expected to be operational cost savings (81%), increased efficiency/reduced settlement cycles (67%), and transparency (43%). In a reflection of the significance of the new technology, a fifth of respondents said that the strategic importance of blockchain within their own organisation was very high, with an additional 34% saying it was high; only 7% said it was a low priority.
PTDL Group members are from all continents and include global banks, custodians, Central Securities Depositories, clearing houses, exchanges, regulators, government agencies and central banks. The organisation brings together post-trade industry participants to share information and ideas about how distributed ledger technologies can transform the post-trade landscape. Its organising committee is made up of representatives from CME Group, Euroclear, HSBC, London Stock Exchange Group and State Street.
Despite the compelling arguments for the adoption of blockchain, PTDL’s members warned that industry adoption remains the most significant barrier to implementing blockchain in a wider post trade industry context – this was cited by 78% of respondents. Regulation, a clear business need, concerns around confidentiality, and lack of standardisation were the other top perceived impediments, with around 50% of participants believing they will be issues.
Jörn Tobias, Managing Director at State Street and PTDL Group representative, said: “The survey shows that blockchain could become mainstream in just a couple of years, with benefits such as better transparency, shorter settlement cycles and cost savings clearly identified by our members. The big barrier to growth, however, is seen as caution: fears over adoption and hesitation about embracing what remains cutting-edge technology. This is a core focus for the PTDL Group – engaging with financial services firms, technology companies and other stakeholders and helping catalyse adoption across the world for the benefit of all parties the financial post-trade area.”