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Why financial infrastructures and intermediaries are actively promoting blockchain application although it means disruption to them

Author

Listed:
  • Yi, Dong

    (Director, China Central Depository & Clearing Co., Ltd (CCDC), China)

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.

Suggested Citation

  • Yi, Dong, 2020. "Why financial infrastructures and intermediaries are actively promoting blockchain application although it means disruption to them," Journal of Securities Operations & Custody, Henry Stewart Publications, vol. 12(4), pages 377-385, September.
    • Handle: RePEc:aza:jsoc00:y:2020:v:12:i:4:p:377-385
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    More about this item

    Keywords

    blockchain; financial infrastructure; financial intermediaries; BigTech; decentralise; trust;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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