Credit Suisse report: Blockchain technology can completely subvert four major industries (download the full report)

Financial services giant Credit Suisse has released a new report analyzing the impact of blockchain on 14 market participants and their companies’ stock price performance.

The types of companies included in the report include large exchanges (ASX and Nasdaq), ancillary businesses (Computershare and Equiniti) and financial services providers (Experian and JPMorgan Chase).

The 135-page report details four major areas that blockchain can disrupt, namely the payment industry, capital markets, financial services, and media . At the end of the report, it is pointed out that the stock prices of the interviewed companies will not be greatly affected.

We believe that in some highly innovative areas that have already received a lot of investment, the impact of blockchain technology will be small.

Overall, this report is more bullish on blockchain than Bitcoin. It seems that most industry reports hold a similar view.

The report also points out 13 obstacles to the development of Bitcoin and questions whether this digital currency is really capable of surpassing the transaction model of companies like Visa, after all, Bitcoin's current transaction processing speed is relatively slow. ( Follow the WeChat public account "Babit Information" and reply "99154" to download the full text of the paper without points )

But blockchain technology is different, and its impact is far-reaching.

We believe that compared with Bitcoin, blockchain is more flexible and can adapt to different development goals. Blockchain has three main features: decentralization, immutable records, and smart contracts. These three features make blockchain technology more advantageous than traditional systems.

The report points out that the areas most affected by blockchain technology are financial services, exchanges, and post-trade processing.

Most of the companies interviewed did not feel a sense of crisis due to the emergence of blockchain. On the contrary, they believed that this technology could bring long-term development opportunities.

Payment field

Credit Suisse admits that it is not clear where blockchain will ultimately be used, but they are certain that the reforms brought about by blockchain are inevitable.

Payment industry participants include commercial acquirers, card issuers, and financial payment processors. Although relatively mature, Bitcoin and blockchain are bound to revolutionize this industry.

But Credit Suisse believes that large companies in the industry do not have to worry about being replaced by blockchain.

We believe that blockchain will neither attempt to replace mainstream payment networks like Bitcoin, nor threaten the middleman status of some international card networks (Visa and MasterCard). In short, we believe that blockchain technology does not pose a potential threat to the payment industry.

Payments processing company Worldpay’s fear of blockchain is overblown.

Capital Markets

Blockchain also brings more opportunities than risks to capital market participants.

The report details the impact of blockchain on custodians, exchanges, and trust companies, and points out that it can create a new data management model. Ultimately, blockchain can reshape the capital market structure, making it more flexible and less costly.

Although it is difficult to predict who will win or lose in the end, traditional companies will definitely benefit from blockchain technology. The report also recommends establishing more cooperative relationships between companies.

The report also points out that major exchanges, such as the Australian Stock Exchange (ASX), the London Stock Exchange (LSE) and the Japan Exchange Group (JEG), will not suffer huge losses from the application of blockchain technology. The report also mentions some auxiliary companies, but does not agree with their business models.

Financial Services

For the banking and financial services industries, distributed ledgers or multiple distributed ledgers have a greater impact.

The report introduces two market opportunities facing the financial services industry. First, distributed ledgers can help reduce the cost of securities trading and cross-border payments; second, distributed ledgers can provide more comprehensive customer information, which is conducive to improving customer service.

The report said that at least some blockchain use cases are feasible in the financial services industry. Many companies, including Goldman Sachs, JPMorgan Chase, and Santander Bank of Spain, have analyzed their interest in blockchain from different perspectives. However, its actual use cases may not mature until three to five years later.

At least the development of blockchain technology has more or less stimulated banks' interest in its potential IT architecture.

This means that the structure and profit distribution of the banking industry will change fundamentally.

The report believes that large banks or financial institutions are more likely to profit from blockchain technology.

media

When it comes to the impact of blockchain on non-financial enterprises, we have to mention the development of Ethereum and its smart contract platform.

The report mainly covers media use cases, including music, television, pay TV, video, and publishing. Blockchain technology can prevent piracy activities.

But unlike other industries, the music industry must build a blockchain platform to profit from it. And this thorough reform will take at least five years.