Chain Financial’s Blockchain Financial Markets Blogs, №3
I look forward to the new Blockchain Financial Markets landscape flourishing with healthy collaboration between Trusted Entities from the Traditional Financial Markets and the Emerging Entities and their technologies.
The Emerging Blockchain Financial Markets Landscape
At Chain Financial we are working with participants across the Traditional Financial Markets landscape to innovate and set out our vision of the future Blockchain Financial Markets landscape. We are building the core technology to enable this new landscape to thrive.
Of course, the requirements and shape of the Blockchain Financial Market landscape are still emerging and ultimately it will be a function of mutual collaboration. At Chain Financial, we are expecting that a few things will be true:
- There will still be important roles for Trusted Intermediaries to play as they have done in Traditional Financial Markets. Indeed, we think that Trusted Intermediaries will be key to enabling Blockchain Financial Markets to grow.
- The blockchain financial products themselves will be programmable and not merely electronic. This means that they will be able to dynamically interact with their environments so that they can deliver enhanced functionality to people. Blog №4 in this series sets out some practical examples of what we mean by this. But for now, let me summarize that value will be added through:
- Supplementing the role of central parties in delivering the same or higher level of trust with blockchain technology. In practice, less double-handling, checking and reconciliation will be required.
- Enabling the ‘back office’ type activities to be done once at the financial product level rather than multiple times at the entity level. This is achieved through programmatically linking blockchain financial products to financial utilities.
- Similar to the internet, Blockchain Financial Markets will enable us both to do things better and to do better things which were previously not possible.
Opportunities in the Blockchain Financial Market Landscape
Blockchain Financial Markets cannot be delivered with technology alone.
Talented people and trusted companies are needed to deliver this important change.
Yes, leading technology is required and we are working on that.
Now is the time for leaders to consider their future opportunities in the Blockchain Financial Market landscape. It will take time to appropriately consider and prepare to be successful in this new landscape. Early engagement will also enable you to have an opportunity to help shape the technology being developed.
Chain Financial is prepared and eager to help you re-imagine yourself in one or more of the following roles:
- An Identity Custodian. As discussed in detail in Blog №2, this is a network critical role. The Identity Custodian is a point of contact for police in their investigations into the proceeds of crime. This opportunity will ideally suit companies that are trusted and committed to the highest ethical standards to assist police whilst also championing the privacy interests of the people who select them as Identity Custodians.
- An Asset Custodian. Blockchain Financial Markets will intersect with the real world in the role of Asset Custodians. Some blockchain financial assets are connected with the physical world, such as tethered/stable tokens. A tethered or stable token is (normally) a programmable representation of a receipt of money held in trust with an Asset Custodian. When appropriately signaled to do so, the Asset Custodian needs to manage the surrendering of the physical asset held to the bearer of the associated blockchain financial product.
- A Product Developer and Promoter. In Blockchain Financial Markets, there is still a role for a Trusted Intermediary to lead the financial engineering of new products. Combinations of physical world assets, blockchain financial products, smart contract coding and financial utilities present new opportunities to deliver better finance functionality. These entities will play a central role. They are somewhat like a master chef who combines various ingredients and cooking methods to deliver a winning dish.
- A Financial Utility Provider. Today financial utility providers focus on servicing at the entity level. They sell treasury systems, accounting packages and taxation advice to corporates and other entities on how to manage and quantify their assortment of non-programmable financial instruments. When financial products are blockchain-based they will also be programmable, and this means that they will be able to directly interact with those same utilities, or at least future versions of them. Relative to now, that interaction will be at a relatively ‘atomic’ level — and indeed each financial instrument, or fraction thereof, should be able to directly connect with a set of appropriate financial utility applications. My hope is that blockchain financial product developers will bundle financial products with utilities that are required in order to ensure that their blockchain financial products are able to look after themselves. No one wants to be sold a problem.
- A Customer Experience Aggregator: Much like how the pharmaceutical industry is transitioning from mass market pharmaceuticals to a future of tailored drugs, finance will also move away from being a mass market impersonal product to a deeply intimate product. The future of finance is personal and deeply connected with helping us to achieve success for ourselves, our families and our communities. The Customer Experience Aggregators will be the maître d’s of finance. The Customer Experience Aggregators will synthesize a unique and tailored experience for the people that they are focused on helping. In doing so, they may draw from multiple ‘kitchens’ and they may be experts in specific but highly relevant financial products or utilities — but only if that is of benefit to the people whom they are focused on using finance to help.
At Chain Financial we welcome your collaboration in building Blockchain Financial Markets. Working together we can enable more people to better themselves, their families and their communities. Get in touch with us and contribute your ideas and effort to magnifying the magic of finance.
About Dave Corbett
Dave Corbett is the CEO and Co-Founder of Chain Financial. Immediately prior to founding Chain Financial Dave Corbett was a banking & capital markets Partner at PwC for more than nine years based in London and Auckland. Dave has nearly two decades of professional consulting experience servicing clients in key markets globally. He is an expert in financial instruments, capital markets, financial engineering and innovation.
About Chain Financial
Chain Financial is a global company based in New Zealand focused on enabling growth in Blockchain Financial Markets. Chain Financial is both building the technology to enable Blockchain Financial Markets and also collaborating with traditional and emerging entities around strategic opportunities in the emerging landscape. The founders of Chain Financial are Dave Corbett, Centrality and Intranel.
Centrality is a New Zealand based blockchain technology company that is a global leader in UNthinking the digital landscape for a decentralised world. Centrality specialise in providing developers and businesses with the tools to create blockchain-based products and services. Aaron McDonald, Centrality’s CEO, is the 2018 EY Technology and Emerging Industries Entrepreneur of the Year.
Intranel is a New Zealand based emerging technology consulting and engineering business. Their business and development teams are experienced at accelerating technology delivery. They have completed significant assignments delivering technical growth, operations management and regulatory compliance for blockchain financial market entities.