Disruption is at hand! Or so many fintech pundits would have you believe. While some may argue that blockchain is receiving more than its fair share of attention, it is becoming increasingly evident that within the hype, there are elements of truth. Just a year ago, you’d find most conversations on the topic of blockchain focused exclusively on bitcoin, the first cryptocurrency to use distributed ledger technology. However, bitcoin is just one application of hundreds or thousands of potential uses. In particular, distributed ledgers and blockchain technology could have a massive impact on the asset management lifecycle, and this potential has just begun to capture the attention of the financial services industry.
If all this talk of disruption and revolution sound familiar, it might be because we experienced a similar hype cycle over the last few decades: the advent and evolution of the internet. What the internet has done for the exchange of information, blockchain promises to do for the exchange of value. Like the internet, we believe that blockchain offers a transformational way to interact with other entities (commercial, private, institutions, etc.) via electronic means.
Below we map a potential adoption curve for blockchain, by taking a cue from the internet’s evolution. For more detail on how we think blockchain could impact the front, middle and back office of the asset manager, download our industry perspective Back to the Future: A Buy-Sider’s Guide to Blockchain.