Friday, 10 April 2020

US Chamber Warms To Blockchain, Fintech Solutions At Capital Markets Summit

The world’s largest business group is taking a heightened interest in blockchain solutions and capital formation methods, particularly as the pace of commerce hastens and the landscape for traditional initial public offerings becomes murkier.

The topic was on display at a capital markets summit Thursday morning hosted by the U.S. Chamber of Commerce, which claims more than three million members and is one of the most powerful business lobby groups both in Washington and internationally.

The event, hosted by the Chamber’s Center for Capital Markets Competitiveness, featured an address from Chamber President Tom Donohue on the “Crisis of the Vanishing IPO” followed by discussions on the digital future of financial regulation and new technologies like data aggregation and blockchain.

Kate Larson, a director at the CCMC, noted that despite some of the froth and excess surrounding initial coin offerings and cryptocurrency crowdsales over the last year, they are a capital formation opportunity that cannot be discounted.

“There are a lot of good opportunities in the space, from the Chamber’s perspective, to raise capital and make some headway there," she explained.

The forward looking tone was notable given many powerful financial incumbents that populate the group’s membership, sending yet another signal that legacy financial firms, infrastructure providers and regulators are watching the tech closely in spite of ubiquitous hype.

“I think it’s very real, but I also think it’s very early,” David Warren, interim CEO and CFO at the London Stock Exchange Group, said of blockchain, noting that the areas that currently experience significant latency are ripe to be addressed by the technology:

“The real opportunity for us in the world of financial markets infrastructure will be in the settlement world. There’s really no reason why we have to be T+2, T+3, T+4. Settlement really could be relatively instantaneous.”

But Charley Cooper, managing director at R3 - the distributed ledger consortium, warned that the complex financial regulatory structure in the U.S. has stunted innovation domestically simply because cryptocurrency and blockchain startups don’t know who to call to find out which federal agency they need to be reporting to:

“If you’re a crypto company and running on borrowed time because you’ve got limited funding and you don’t have resources to figure out who to call, you’re going to find yourself sideways with somebody, and at that point you’re going to find yourself in reactive mode. If the federal government wants to step in and stake a claim to make a point, that’s a pretty hard thing to defend against.”

Mac McGary, president of the Sweetbridge Alliance, echoed that line of thinking, stating that the U.S. needs to be more proactive in fostering an innovation friendly climate for blockchain and cryptocurrency entrepreneurs, especially given the speed at which other countries are moving on this front.

“If one of our best exports as a country is innovation, then however it manifests itself we need to be investing in innovation,” he said.

But any new framework for blockchain and digital transformation in finance needs to incorporate all stakeholders, including regulators - who by nature tend to be perpetually behind the curve on technological issues.

Yvette Hollingsworth Clark, EVP and regulatory innovation officer and Wells Fargo’s Innovation Group, emphasized the need for greater digital regulatory capacity to keep up with the pace of change within the financial industry, going so far as to urge regulators to incorporate "digital ethics" capabilities within their agencies.

“You need someone who can read code, who can interpret algorithms correctly ... and ensure data is being used in an appropriate way.”

source: Forbes 
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