Public blockchains are becoming more widely accepted, with recognition growing of the scalability, cost savings, speed, security and transparency they can bring to financial markets.
Many market participants, however, may still be uncomfortable with the governance of permissionless blockchains. Others remain intuitively suspicious of networks whose very name suggests a high level of openness and accessibility.
Some may consider this to be incompatible with the high levels of confidentiality and security associated with the financial services industry. Participants at May’s OMFIF panel on distributed ledger technology and the future of public blockchains discussed how valid these misgivings are and what can be done to address them.
Their relatively short history means that public blockchains remain unknown territory for many market participants. To gauge the level of knowledge about these networks, the panel discussion began by asking viewers to answer four questions about public blockchains. Their responses suggest that the market has become increasingly well-informed in recent years.
- Question one asked viewers to name the multilateral organisation which broke new ground recently by issuing a bond using a public blockchain – the World Bank, European Investment Bank or Asian Development Bank?
- The second question asked viewers when blockchain was first officially used in a wholesale financial transaction.
- Question three asked which smartphone operating system uses an open-source protocol to write underlying code.
- Finally, members of the remote audience were asked whether they would favour public or private blockchains when exploring the digital representation of an asset.
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