Since Blockchain came to prominence, the Finance sector has been one of the principal drivers behind the development of the technology. The implications of Blockchain technology in this space, combined with the sector’s willingness to embrace technological change has created the ideal conditions for genuine innovation. Very few companies, even within this space, can compete with Barclays’ track record for willingness to explore the benefits Blockchain technology, with over 45 experiments within the Blockchain ecosystem and a key role as a founding and current member of the prominent Blockchain consortium R3. At the heart of Barclays’ activities with Blockchain is Anthony Macey, Head of Blockchain Research & Development. We were delighted to have a chat with Anthony about his experiences with Blockchain, explore his thoughts on the future direction of Blockchain within the finance sector, and gather a few tips for those looking to Blockchain to improve their business practices.
We kicked off by asking Anthony about his first encounters with Blockchain and Distributed Ledger Technologies, and what exactly about these technologies is able to create the buzz and disruption it is currently achieving in the Finance industry – an industry rich with established best practices. Pointing to Bitcoin as his first meeting with Blockchain technology, as is often the case, he noticed its impacts on Information and Cyber Security. “While working in data analytics, I had an epiphany moment around the inefficiencies of irreconcilable data sources and that the underlying principles of Blockchain may help this”. Anthony suggested that Blockchain’s ability to create a new principle of data security and sharing without dependence on centralised counterparties was the most exciting aspect of the underlying technology, and a key element in the Blockchain hype.
With post-recession levels of regulation in the Financial Sector at a high, the regulation of Blockchain and its constituent parts has naturally become an area of significant interest, especially considering the explosion of initial coin offerings and cryptocurrencies in recent times. We asked Anthony for his thoughts on the regulatory side of Blockchain, and how best he feels Blockchain should be managed in order to balance the need to protect consumers and the demand for innovation. Anthony was sympathetic, believing that regulators have an unenviable position with no clear, right answer to the dilemma – “Just because something is innovative does not mean it should not be expected to conform to appropriate security, data and consumer protections, what appropriate actually means is where the regulators have a difficult task”
Barclays has been a leading figure within the banking community in its support for the adoption and development of Blockchain, including being the first UK Bank to offer accounts to Blockchain companies. We wanted to ask Anthony where he sees Barclays’ role in the future growth of Blockchain. Initially, he said there was a huge undertaking at Barclays to distil the signal from the noise, rationalising the multitude of startups with apparent solutions in order to identify those “with truly novel approaches and real added value”. When talking about how Barclays can expect to be involved in the Blockchain sphere going forward, Anthony highlighted a few key issues, data standardisation and the uniformity of contracts to name but a few – “Barclays seeks to identify those hard problems and then highlight them to the wider community to solve”. Giving us an insight into Barclays’ work at present, he praised the work of the CTO’s office in attempting to answer these key questions, in particular the minutia of smart contract legalities and standardisation of contracts in order to achieve efficiency and cost benefits.
We then moved on to ask Anthony for his thoughts on the next step for Blockchain, and where he thought the technology was headed in the immediate future: whether the hype bubble will burst or continue to balloon. Predicting a divergence between the various key aspects of Blockchain technology (Cryptocurrencies, smart contracts and Distributed Ledger Technology), Anthony highlighted the key features of each going forward, the innovation of cryptocurrency platforms, the efficiency of DLT, and smart contracts being applied to both for further efficiency and the creation of new dynamics. Referring specifically to smart contracts, Anthony explained his view that smart contracts will develop into an industry of their own, smart contract templates being a traded commodity as website templates often are at present. However, when talking about the cryptocurrency side of Blockchain, Anthony expressed concern that “the bubble itself will almost certainly burst from a financial standpoint”, citing the amounts of money being pumped into largely unregulated virtual assets with little legal requirements or evidence of return, a clearly unsustainable state of affairs. Anthony did though, caveat that while their values may drop, the larger more established coins such as Bitcoin and Ethereum are unlikely to go anywhere.
“Why? Always ask why. Children do it all the time, that’s why they learn so much.”
We finally asked Anthony for a few comments about Barclays’ work as part of R3, the consortium behind Corda, and the advantages and challenges of working as part of this group. He highlighted working with a “forum of forward-thinking, like-minded people” to solve the problems they conjointly face as a key benefit, though pointing out that Corda is not strictly a Blockchain platform – “thinking like this starts with the wrong question – The correct question is “What problems do we need to solve?” and not “How do we solve these problems with Blockchain?””. Anthony underlined the need to solve the problem, rather than vindicate a technology choice such as Blockchain in order to achieve true efficiency gains. Rounding off the interview by asking Anthony for any advice aimed at prospective adopters of Blockchain, Anthony re-iterated this point – “Why? Always ask why. Children do it all the time, it’s why they learn so much. If you’re looking to adopt “Blockchain technology” you probably haven’t asked why enough”, before concluding – “If however you are looking to innovate in a certain sector and you ask questions such as “why has this not been solved before?” or “why is Blockchain more appropriate to solve this than other options?”, then you are far more likely to be productive.”
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