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Enterprises Building Blockchain Confront Tech Limitations Posted on : Mar 23 - 2018

Blockchain is here to stay, but so are centralized authorities, too.

That realization was the general takeaway at the Depository Trust and Clearing Corporation's annual fintech symposium in New York City on Thursday where executives behind some of the most mature blockchain platforms currently in the works took the stage to discuss the benefits and limitations of the nascent technology.

While in some cases, enterprises, including the DTCC, which conducts $1.5 quadrillion dollars in securities transactions per year, have found that blockchains are more powerful than first expected, it's clear that there are still significant hurdles to overcome.

"We've learned a lot about what works and what doesn't," said Michael Bodson, the CEO of the DTCC, adding:

"We've wrestled with the technology's limitations, but we're also uncovering new possibilities to help lead the digital transformation of the post-trade environment."

During Bodson's opening remarks, he set the groundwork for the rest of the day's talks by recounting some of the lessons learned by the DTCC's ongoing implementation of blockchain in its $11 trillion Trade Information Warehouse (TIW).

Designed to reduce the time it takes to clear over-the-counter derivatives, unexpected obstacles in the process have resulted in a delay of a commercial launch from this quarter to next year. Given the TIW's relatively low volume compared to the rest of the DTCC business, he doesn't expect any broader rollout of the technology any time soon.

"At the DTCC, we seamlessly process 60 million trades each day, and during peak times like we saw last month, we handled as many as 90 million transactions," he said. "It would be impossible to do this today using a distributed ledger."

He continued, citing a Deloitte report that showed out 26,000 blockchain projects that were started since 2016, as evidence of the narrowing scope of blockchain's potential utility. Of those blockchain projects he said only eight percent are currently still active.

"As the industry has come to the realization that blockchain's potential isn't limitless, companies are focusing their resources on initiatives that can deliver real client value," he said. View More