The DTCC's Fear of Missing Out on the Blockchain
Millenials like to joke around about "FOMO," but it was a pillar of the financial services industry that showed it didn't want to get left behind this week.
No one likes missing out on things.
Whether it's a party, a concert or some kind of great pop-culture moment, most people, especially those under the age of 30, don't like the idea of being left behind.
To that point, the phrase "FOMO," or "fear of missing out," has become popular among millennials. The always educational Urban Dictionary defines it as, "the fear that if you miss a party or an event you will miss out on something great."
With all that in mind, I wasn't too surprised when I saw the Depository Trust and Clearing Corp. (DTCC) released a white paper detailing how the entire industry needs to come together to better understand the proper use cases for distributed ledger technology.
To put it bluntly, the DTCC got FOMO when it came to blockchain technology. Practically any story you read about the distributed ledger talks about how the technology has the potential to disrupt post-trade processes, the very business the DTCC has thrived in for over 40 years.
Pros and Cons
I'll be honest, I was very torn when I initially read the DTCC's white paper. As I read through the DTCC's list of what it believes to be limitations of the blockchain, part of me couldn't help envision an old man yelling at young kids in his neighborhood riding their bicycles too fast by his house.
"Slow down, you guys! The distributed ledger won't be able to save you from everything! You need to reel it back in!"
On the other hand, the old guy has a point. The industry IS too siloed when it comes to solutions using distributed ledger. It does seem like EVERY firm is talking about how they are investing money into the blockchain. Wouldn't it be better if there was a way the industry could come together to work on more focused solutions? As the old saying goes, ‘A rise in tide raises all ships.'
Look no further than the swaps market to understand what can happen when everyone decides to go about it their own way without any oversight. I'm sure if that industry could get a mulligan, they wouldn't be interested in having 23 swap-execution facilities (SEFs).
Now, it seems clear the firms that are able to figure out how to successfully implement blockchain technology have the potential to make a lot of money. It's a big ask to try and get firms all competing with each other to work together on finding a solution. However, if anyone could do it, it's a firm with the experience the DTCC has.
Invested Interest
The thing that bothered me the most about the white paper was the fact that less than a week before it was published it was announced the DTCC was one of 13 financial firms that invested in Digital Asset Holdings. The investment was the first the DTCC has made into a firm that specializes in distributed ledger technology.
For me, it seemed a bit ironic that the DTCC was calling for massive collaboration when it had already hitched its wagon to one specific horse in the race. If I owned a blockchain firm, I don't know how accepting I'd be of the DTCC leading the charge on the development of distributed ledger solutions knowing it has a financial interest in one specific vendor.
Fortunately, I had the opportunity to speak to DTCC chief technology architect Rob Palatnick about this. As you can see in the story, Palatnick made some great points about why there wasn't necessarily a conflict of interest. He also openly stated the DTCC was willing to work with other vendors in the space.
Going forward, I think the DTCC provided plenty of valuable advice in its white paper. After all, when you've been in the space for over four decades you tend to learn a thing or too. So while I don't agree with every word of it, there are lessons to be learned from the paper, even if it was created thanks to a little FOMO.
Food for Thought
-We started a podcast! Every Thursday WatersTechnology US editor Anthony Malakian and I will record a podcast touching on the biggest news stories from the past week, with a few sports, pop culture and political stories tagged on at the end. This week's podcast, which will be posted by Thursday afternoon, will touch on the DTCC's white paper discussed above and Anthony's story on the StatPro-Investor Analytics merger. Click here to check out the first episode, which touched on Bloomberg terminals and work force issues. If you'd like to get updates every time a new episode is posted, subscribe to it here.
-The biggest news of the weekend was obviously Winter Storm Jonas. Hopefully, everyone stayed safe and warm. If there is one thing I learned from spending four years of college at a school just south of the Canadian border, it's that a blizzard is nothing to mess around with. Get some wine and fire up the Netflix.
-As much as I like making big statements on here, I am willing to back them up as well. I won't shy away from the spotlight when I'm wrong. I made a pretty strong statement last week about the status of Peyton Manning ─ I believe the term "zombie" was used ─ and I was clearly wrong. So congratulations to Peyton. As a very spiteful Jets fan, I am very happy that he ruined Tom Brady's season. With all that being said, go HEAVY on the Panthers. The future is here, and its name is Cam Newton.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Ice moves to meet demand for greater cloud, AI capabilities
The exchange also outlined competitive advantages behind managing its data and cloud strategy internally during its Q1 earnings call on Thursday.
FactSet looks to build on portfolio commentary with AI
Its new solution will allow users to write attribution summaries more quickly and adds to its goal of further accelerating discoverability, automation, and innovation.
How Ally found the key to GenAI at the bottom of a teacup
Risk-and-tech chemistry—plus Microsoft’s flexibility—has seen the US lender leap from experiments to execution.
The IMD Wrap: Beginning of the end for data audits?
This week, there’s exciting news for data bean-counters in the form of a partnership between two vendors that could change the way we view and track data usage and audits.
S&P debuts Spark Assist genAI copilot, draws up ‘Blueprints’ of combined datasets
S&P’s Kensho subsidiary has rolled out new emerging tech products leveraging AI to explore and combine the vendor’s wealth of datasets to solve common use cases.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- DTCC urges affirmation focus ahead of T+1 move
- Women in Technology & Data Awards 2024: All the winners and why they won