Too Many Cooks Will Spoil Blockchain Broth, Says SETL chief

Broad industry engagement is not the way to build standards for financial services blockchains, Peter Randall, CEO of payments infrastructure SETL, told delegates at Sibos in Geneva this week.

Too many interests will detract from standardization, he said on a panel billed as "RegTech Versus FinTech" that focused on industry efforts to develop blockchain, or distributed ledger technology, solutions.

Randall drew a parallel between the standardization efforts for distributed ledger technology and those for communications protocol FIX, developed in the early 1990s by Instinet, Salomon Brothers and Fidelity Investments.

"They had working technology that they used between the three of them from which they were able to get the benefits of lots of activity and the ability to standardize. That was very significant because they had a system to show people and invite people to join," said Randall.

"What really scares me is the idea that you could have a multitude of financial institutions with a multitude of different jurisdictional issues and a multitude of different takes and perspectives. Effectively, you would end up with something that looks like the lowest common denominator."

A better approach would be to develop solutions that work and then make those the standard, he said.

A number of panellists at Sibos cast doubt on the idea of one universal blockchain. They said a more likely scenario is that of multiple ledgers within and between institutions, which crucially will require standards as they will need to interoperate and integrate with legacy systems. Many institutions have joined the Hyperledger Project, a cross-industry blockchain initiative that is seeking to develop these.