in India

Fintech in India - A global growth story
24
Global data for the most capitalized
blockchain companies (USD million)in Australia
21 Inc.
Coinbase
Circle
BitFury
Chain
Ripple
Xapo
Bitpay
33
44
41
40
USD million
Source: The Blockchain Report: Welcome to the Internet of Value, Needham and Company,
https://needham.bluematrix.com/sellside/EmailDocViewer?encrypt=4aaafaf1-d76e-4ee3-9406-
7d0ad3c0d019andmime=pdfandco=needhamandid=sbogart@needhamco.comandsource=mail, accessed on
30 May 2016
Financial institutions are rapidly developing prototypes to
gain the first mover advantage in the application of the
technology. As per a leading European bank, blockchain has
the potential to reduce the banking industries operational
and infrastructure costs by USD 15–20 billion per annum 04 .
In developing countries, start-ups such as BitPesa in East
Africa and Rebit in the Philippines are leveraging blockchain
to facilitate remittances at a cost that is lesser than the
traditional transfer method by 3 per cent 05 .
Globally, financial institutions are collaborating with fintech
firms and setting up their own in-house labs for testing
blockchain technology.
Notable examples include the following
• R3CEV, a consortium of 42 global financial institutions
remodelling the trade and transfer process of commercial
paper with the use of blockchain.
• In the U.K., five leading fund houses have joined hands with
fintech companies, start-up technology businesses and
consulting firms to evaluate applications such as trading of
illiquid securities. The aim is to reduce costs and remove
intermediaries through the adoption of blockchain.
• NASDAQ has announced the successful application of
blockchain in the record and settlement of private securities.
60
76
107
121
Global Blockchain regulations
Regulatory approval is one of the key success factors of
technology adoption in the next few years. Though many
regulatory boards have expressed interest, the formal
policing of the technology is still awaited.
• In the U.S., the SEC (Securities Exchange Commission)
is approaching companies that are seeking to use
blockchain for transfer of securities. Recently, the SEC
has approved Overstock to issue stocks with the use of
blockchain.
• Australian Securities Exchange announced that it is
building a private blockchain for clearing and settling of
trades.
• In the U.K., the Financial Conduct Authority is
continuously monitoring the development of the
technology 06 .
Despite such massive acknowledgement of the
technology, there is another school of thought that
questions if blockchain would sustain the hysteria created
around it globally. The kind of expectations that have
been created around it are huge and achieving short-term
benefits might not be possible. A more pragmatic
approach is required to realise the true potential and
benefits of blockchain. Some of the issues that might
come in the path to success are scalability, operational
efficiency, integration with legacy applications and
gaining a global regulatory acceptance. Nevertheless, this
is the time for experimentation and corporates involved in
it are expected to benefit in the longer term and sustain
the adoption of widespread implementation.
04 Santander: Blockchain Tech Can Save Banks USD20 Billion a Year, CoinDesk, 16 June 2015,
link accessed on 20 May 2016.
05 The Blockchain and Mobile Money for Agriculture in Developing Countries?, Digital Currency
Council, 13 February 2015, link accessed on 20 May 2016.
06 UK Financial Regulator Vows to Give Blockchain 'Space' to Grow,
http://www.coindesk.com/uk-financial-regulator-blockchain-space-grow/ accessed on 30 May
2016.
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