Another fun and busy week in Blockchainland. Many thanks to the folks at Finance Montreal for hosting me on Tuesday and Wednesday and for putting up with my Trumpchain jokes during my panel session...The market is gearing up for another barnburner as Sibos kicks off in Geneva. Stop by the jauntily named "Conference Room 3" on Tuesday to catch a panel with our CEO David Rutter.
R3 in the News
It was gratifying to see the interest* in our announcement this week on the application of DLT to the management of reference data. We partnered with Axoni and SIFMA, along with seven buy and sell side institutions including AB (Alliance Bernstein), Citi, Credit Suisse and HSBC, to demonstrate how multiple actors can manage and agree upon key reference data facts without having to rely upon a traditional (centralized) data aggregation model. As FoTWR Emmanuel Aidoo says below, we run the risk of getting so focused on the allure of 'instant settlement' that we overlook some of the other powerful and, arguably, more achievable applications of DLT:
“Using Blockchain and Distributed Ledger Technology as a shared reference data backbone for the industry makes intuitive sense. Our vision is to demonstrate how distributed ledgers applicability can go beyond settlement and help reduce duplicate reference data costs and improve data latency which will ultimate lower costs and reduce operational risks,” said Emmanuel Aidoo, who heads the Distributed Ledger and Blockchain effort at Credit Suisse.
[*Request to WSJ editors: please please please stop referring to things being "bitcoin-like" when they have nothing to do with the bitcoin blockchain!]
R3 (and many others) in China
Our man Tim "The Swanny" Swanson was kind enough to send the following field report from the backseat of an Uber-like car service somewhere in Asia:
The fact that the organizers invited me to formally present speaks volumes of how inclusive the Ethereum community is. While I do not necessarily agree with their governance decisions (cue Groucho Marx and club memberships!), their inclusivity has led to a very healthy diversity of opinions as shown by the fact I wasn't booed off the stage for discussing topics like regulated clouds and data custody laws.
Altogether about 800 attendees came to the event which is pretty impressive considering that Ethereum as an idea is only about 2.5 years old. The first few days the attendees were mostly expats/foreigners while the final two had more Chinese attendees than laowai.
Notable notables: I was talking to a small group of bankers from South Africa in the main lobby of the event (as one does). They were peppering me with questions about zero-knowledge proofs. As I glanced around the lobby, I noticed that the creator of Zcash, Zooko Wilcox O'Hearn, was less than 20 meters away. I waved him down and he sauntered over to explain how to handle/track multiple assets with a ZK proof system to a circle of people that grew as he spoke. It was that kind of event: you could just bump into alot of brain power everywhere you went.
Reports and Releases
Congrats to our friends at RBS for announcing Emerald, an open source "Clearing and Settlement Mechanism (CSM) based on the Ethereum distributed ledger and smart contract platform." Watch this space for more soon.
The Roubini ThoughtLab released a report entitled Wealth and Asset Management 2021 which focused on the adoption curve for asset managers (see above on ref data) with new tech. The headline was "nearly two-thirds (64%) of asset managers [surveyed] expect to use blockchain technology within the next five years."
SWIFT released a short paper on smart contract standards, a theme that we and others have spent quite a bit of time on...but one thing I haven't had time to do was give this a careful reading, due to being unavoidably detained on the Wooden Warrior this weekend, so we will post more on this next week.
Accenture says it addresses the issue by allowing the trusted authority to edit individual pieces of the chain, subject to validation by the participants. In other words, Accenture has solved the blockchain's immutability problem by creating a giant, horribly inefficient Excel spreadsheet. Which raises another question: When will financial institutions stop to ask themselves why they need a blockchain at all?
Maybe this is the real world fulfillment of the aforementioned Trumpchain: a shared ledger that has a very loose definition of what is and isn't a fact...