DTCC CEO pledges blockchain experiment in New York

Rage Comment : DTCC announced a distributed ledger technology test. Although industry leaders have discussed blockchain technology, its potential impact is not optimistic. Some financial processes are complicated and lengthy, but the post-transaction process is stable, reliable and efficient through the expansion of cloud technology. Improving the verification time of Bitcoin transactions can effectively expand the scope of application of blockchain.

Translation: Nicole

DTCC President and CEO Mike Bodson today revealed that the U.S. clearing and settlement giant plans to conduct additional distributed ledger technology tests.

DTCC President and CEO: Mike Bodson

The comments came during Bodson’s opening remarks at the 2016 Blockchain Symposium, a one-day event held by the DTCC in New York. The event featured attendees from financial institutions such as Barclays, BlackRock, Goldman Sachs and SWIFT.

After DTCC announced a partnership with Digital Asset Holdings to test distributed ledgers for repo market applications, rumors emerged that DTCC was planning other blockchain technology developments.

As DTCC conducts its digital currency experiments, Bodson indicated that further announcements are imminent, possibly in collaboration with partners from other industries.

Bodson said:

"We will work to make more information public over the coming months."

The main point of the video was to record industry leaders discussing the hype about blockchain technology, but Bodson was not optimistic about its potential impact.

Bodson wanted to stress that while some financial systems were “unnecessarily complex”, the post-trade process was “efficient and relatively low-cost” and “robust and reliable”.

He said:

“Blockchain is not a hammer, and every problem that arises is not a nail. There are opportunities to improve post-trade processes, but extending existing technologies such as cloud technology will be more efficient.”

Bodson believes any technological change will require additional “investment, time and money” to realise these use cases, but that will require more collaboration between the major players.

He said:

“Almost every company is exploring how to use consensus technology through their own efforts. Such activity can stimulate innovation. But it does not mean there are no pitfalls. With so many companies working on this, the industry is taking risks by creating a large number of distributed ledgers.

Need for cooperation

Bodson went on to describe his vision for the DTCC and the role he says it will play in the future of blockchain to transform business, positioning it as a solution to an overcrowded environment.

He said:

“Let’s emphasize collaboration, and traditional trust institutions should play a leadership role in supporting the implementation of distributed ledgers.”

Bodson posits that such participation could help improve efficiency and reduce costs, while helping the industry deal with a number of challenges and issues surrounding the existence of new technologies.

On the ongoing question of scalability of distributed ledgers, Bodson cited the discussion around Bitcoin, and whether certain network features should be changed to allow more transactions to be processed at a time.

Noting that Bitcoin recently increased its transaction verification time to 43 minutes, he sees this as a sign of wider adoption of blockchain, perhaps in an effort to regulate the amount of existing technology used by the DTCC.

Bodson noted:

“We believe that distributed ledgers like blockchain can revolutionize, but they are not something that is expected.”