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Shaping the future of finance

If you liked it then you should have put a chain on it

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I tweeted this the other day, and it got a lot of likes, so I thought I’d make it today’s blog title.  We seem to have lost a lot of buzz on blockchain this year, even thought it’s still buzzing away as much as ever before.  I recently was talking about how blockchain is great for IslamTech, as Islamic financial instruments have different degrees of compliance with Sharia Law, dependent upon the Imams who authorise the product.  In some countries, their interpretations of usury and leverage are different to others, and a shared ledger would be a great way of bringing transparency to the area.

Equally, whilst in Dubai, I was hugely impressed with their commitment to shared ledger technologies, with the Government announcing that all government contracts would be blockchain-powered by 2020.  From October 2016:

The Crown Prince of Dubai announced a strategic plan today that would see all government documents secured on a blockchain by 2020.  In remarks, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum explained the effort is part of a larger bid by the emirate, one of seven in the larger UAE, to set the "standard" for smart cities.  He said:

"The emirate is building on that achievement by constantly working to foresee the future and keep up with the fourth industrial revolution and all the prospects of increased efficiency that come along with it."

According to a statement, the Dubai government estimates its blockchain strategy has the potential to generate 25.1 million hours of economic productivity each year in savings, while reducing CO2 emissions.

This was followed by the news in March 2017 that they’ve selected IBM and Consensys to do the work so that anyone working for or with the Dubai authorities, all benefits to citizens and all identification information would all be ledger based in three years.  The goal is to become paperless by shifting all transactions to blockchain - an online encrypted database - by 2020.  Amazing, and don’t doubt they will do it as this is a country that has risen from nothing in 15 years to become a leading tourist, commercial and financial centre, with their brethren in Abu Dhabi, Bahrain and Qatar following close behind.

Meantime, I think the reason why blockchain news has quieted is that people are actually working on it. It’s no longer the hype, talk and bustle of blockchain ideas, but the quiet getting on and doing it.  Here’s just a few headlines in the past few weeks:

However, a lot of blockchain hype has been around areas that I feel are not right, such as clearing and settlement.  Clearing and settlement is an industry issue of agreements between governments, central banks and their counterparties about how risk is managed between financial firms.  It’s not about a technology.  Until the governance discussions are ironed out about how custodians, clearers, counterparty banks, central banks and regulators are resolved, there is no clearing and settlement shared ledger implementation.

Equally, a lot of blockchain hype muddied the waters.  After all you can be blockchain-inspired but don’t need to use a blockchain, as R3 made clear.

Finally, much confusion abounds in this space as it’s pretty technical – ask the average banker to explain the difference between Ethereum and Bitcoin; a shared ledger and a blockchain; and how consensus mechanism operate; and their faces will normally crumble into grief.  Don’t go there.

So, there is a lot happening in the blockchain space folks.  It’s just that we’eve gone past the hype into the trough of disillusionment whilst people are just getting on with it, and changing the world.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction.”  Bill Gates


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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