The vast majority of firms that make up the plumbing of the global financial services sector are exploring the potential of blockchain technology, according to the results of a new survey from the World Federation of Exchanges (WFE) published on Thursday.
Specifically, 84% of so-called financial market infrastructures (FMIs) that participated in the survey are either investigating possible uses for distributed ledger technology (DLT), or are actively engaged in projects in this area.
DLT’s potential for enhancing efficiency and delivering cost savings in the clearing and settlement process is cited as the most likely impact on capital markets — although the survey also notes that some firms are considering its possible use in providing new services and generating new revenue opportunities.
However, the survey also found that firms see several barriers to adopting the technology, including the fact it remains new and untested, along with an assortment of regulatory, legal and technical risk factors. FMIs also see challenges around user acceptance, the survey suggests: “[Survey participants] agreed that continuing collaboration and open dialogue is the most important next step in the evolution of DLT.”
“A powerful finding from our survey is the overwhelming number of FMIs that are already progressing work around DLT,” says Nandini Sukumar, the WFE’s CEO, in a statement. “This shows we are firmly moving toward a world in which the technology could become applicable to global capital markets. DLT has been a key strategic focus for the WFE Post-Trade Working Group, and [this] research report is the first in a series of public material we will be issuing on the topic.”
“Whether the hype around blockchain will be realized is still unclear, but what is clear is that at least some market participants are actively engaged in investigating the opportunities the technology presents,” adds Siobhan Cleary, head of research and public policy at the WFE, in a statement.
The WFE and the International Organization of Securities Commissions (IOSCO) conducted the survey in July and August. It will feed into broader IOSCO research into financial technologies and their application in capital markets that will be published later this year.