It was just revealed that in July 2016, the World Federation of Exchanges (WFE), in collaboration with the International Organisation of Securities Committees (IOSCO), surveyed exchanges and post-trade infrastructures (Financial Market Infrastructures) regarding their use of and perspectives on distributed ledger technology (DLT) or blockchain.
The results of the survey show that FMIs across developed and emerging markets and along various parts of the value chain are actively investigating the opportunities blockchain presents. In most cases FMIs are focusing on applications which aim to create process efficiencies and cost savings, though some are also pursuing new service lines and revenue opportunities.
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The WFE found that FMIs are uncertain about the extent to which the technology will live up to its promise. They also highlighted several risks that need to be addressed such as risks of maintaining security standards across a decentralised database, legal and regulatory uncertainty, and concerns around scalability. At this point, FMIs favour collaborative engagement with regulators as the technology and its applicability to the capital markets industry evolves.
The overwhelming majority of FMIs who responded to the survey (21 out of 25 or 84%) indicated they were either investigating the applicability of distributed ledger technology to their environment or actively pursuing related initiatives (to the point in one instance of already having deployed a blockchain-based application). Of this set of positive respondents, seven replied they had gone as far as to allocate budget to their DLT initiatives. A further 13 FMIs who had not allocated budget as yet, said that they expected to do so in future.