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Why financial infrastructures and intermediaries are actively promoting blockchain application although it means disruption to them
Journal of Securities Operations & Custody,
12
(4),
377-385
(2020)
Abstract
Financial infrastructures and intermediaries are at the ‘centre’ of the role of the financial market, and they have been targeted by the blockchain as part of the ambitions to rebuild trust since the very first day when blockchain was born. Then why are they still avid for blockchain applications more broadly? The author analyses that the blockchain strategies of major financial infrastructures and intermediaries are actively creating ‘centralised’ private chains or consortium chains to help expand cooperation, upgrade business models and gain regulatory support. Even so, their endeavours for blockchain application have failed to stop the sweeping disruptions of BigTechs. BigTechs are not only blockchain technology suppliers to traditional financial institutions, but also their competitors. The author advocates deeper integration rather than ‘disruption’ for the financial industry and blockchain technology. A practical pathway would be to find an area where technology and industry can be integrated, and to encourage the ‘adjacent possibility’ of technological innovation.
Keywords: blockchain; financial infrastructure; financial intermediaries; BigTech; decentralise; trust
The full article is available to subscribers to the journal.
Author's Biography
Dong Yi holds a PhD in management. She is a Director at China Central Depository & Clearing Co., Ltd, the central securities depository of the largest scale in the China bond market, and senior accountant as well. She has been deeply involved in the theoretical innovation and reforming exploration of the China bond market (the second largest bond market in the world since 2019) and China financial infrastructure industry for about 14 years. Her main research fields focus on the financial infrastructure industry and financial technology, about which she has published several papers in academic journals. In 2016, she translated and published the Chinese version of Plumbers and Visionaries: Securities Settlement and European Financial Market (written by Peter Norman, 2007, John Wiley & Sons Ltd.), which is highly praised by the industry.
