1. The Straw Man of Tabb
Larry Tabb has released a (paid) report entitled Blockchain Clearing and Settlement: Crossing the Chasm. I have read a few summaries and excerpts (here here and here) yet not the full report...so at the risk of attacking a straw man of a straw man: the arguments noted against using a blockchain seem to assume a version of the technology forever stuck in 2015. There (seems to be) no concept of different versions or applications of shared ledgers that account for the issues raised. Drop us a line if you want to chat Larry.
The Brookings Institute released part 2 of their summary of the recent Hutchins Center conference this week. This is welcome news, as it gives me another excuse to showcase my favorite meme featuring our very own Charley Cooper, aka "Scared Banker Guy":
Ripple released a report earlier this week that goes into detail on how their protocol can save costs in global interbank settlement. Interestingly, the report segments the solution, showcasing both Ripple and Ripple+XRP.
Back by popular demand (of one reader at least), more snippets of RegTech news. CFTC hosted a rescheduled Tech Advisory Committee meeting this week, featuring one section on blockchain. This article gives a good review of the discussion:
Brad Levy, CEO of financial information firm MarkitSERV, told regulators during this week’s meeting that he believes operational risks and costs could be immediately reduced by implementing blockchain technology in an exchange setting.
But such a network would and should look quite different from the Bitcoin network, Levy said, characterizing the cryptocurrency’s users as favoring anonymity. “We don’t think that that’s necessarily the model that our industry will adopt,” he added. “Identity will be key.” Along those lines, Levy assured the CFTC that he would expect regulators to gain more immediate access to trade data under a blockchain system. “We think about the regulators as a node. …. They themselves become part of the network and have their own permission-ing, based on whatever rights they’re supposed to have as regulators,” Levy said.
The RBA follows the lead of other CBs by making a few positive comments towards the idea of CB issued digital currency:
"A plausible model would be that issuance would be by the central bank, with distribution and transaction verification by authorised entities, which might or might not include existing financial institutions," Mr Richards said. "The digital currency would presumably circulate in parallel, and at par, with banknotes and other existing forms of the national currency."
Finally, the FCA checks back in to update the good progress made so far on their Innovation Hub initiative:
[Christopher Woolard, director of strategy and competition] says the FCA is particularly interested in exploring whether blockchain technology can help firms meet know your customer or anti-money laundering requirements more efficiently and effectively, concluding: "We are engaged in discussions with government and industry on this issue."
3. Bitcoin to the Core
Joi Ito chimed in this week with his thoughts on the block size debate, casting Bitcoin Core in a light similar to a salon of fin de siecle artists:
The future of Bitcoin, decentralized ledgers and other Blockchain-like projects depends on this community. Many people call them "Bitcoin Core" as if they are some sort of company you can fire or a random set of developers with skills that you can just train others to acquire. They're not. They're more like artists, scientists and precision engineers who have built a shared culture and language. To look for another group of people to do what they do would be like asking web designers to launch a space shuttle. You can't FIRE a community and, statistically speaking, the people working on the Bitcoin ARE the community.
American Banker has a lengthy profile on Barry Silbert (with some quotes by the Swanny as well), concluding with this: "Within five years, he predicts, bitcoin either 'will be a failed experiment, and something else will have taken its place, or it will be eating the world.'" Perhaps those at the invite-only Satoshi Roundtable will be doing the eating, and not just the kind that their all-inclusive resort bracelet will get them during their retreat...As the Satoshi Whitepaper says: "We propose a solution to the double-spending problem using a peer-to-peer network coupled with annual, private, mostly male, retreats for libertarian celebrities."