Requirements, challenges, and constraints met on the way to adopting the blockchain technology.

1. Blockchain Use Cases
Think of a “Public” Pub/Sub Queue

2. SWIFT Institute: “Little short-term payoff”
● “Impact and Potential of Blockchain on the Securities Transaction Lifecycle”
● Opportunity: Cost and risk reduction
● Challenges & Constraints
○ Regulatory support required,
○ Institutional board-level support necessary,
○ High investment with little short-term payoff
● Technical choices
○ Access Rights: Permissioned v. Permission-less
○ Deployment progress: Iterative v. ‘Big Bang’
○ Business Process Re-engineering pre-requisites

3. Accenture: “Not mature enough”
● “Delivering an industry-standard platform through community collaboration”
● Opportunity to
● Benefits
○ Trusted information propagation
○ Full Traceability
○ Simplified reconciliation (settlement)
○ High Resiliency

4. SWIFT & Accenture: “Not mature enough”
● Requirements, Challenges & Constraints
○ Strong governance
○ Data controls
○ Regulatory compliance
○ Standards (or lack thereof)
○ Identity framework
○ Security & Cyber defence
○ Reliability
○ Scalability

5. A Simple Use Case
A B
D
EF
G
H C
● Inter-organizational systems integration

6. Simple Use Case
Blockchain as persistent “Public” Pub/Sub Queue
A B
D
EF
G
H CPeer Peer
PeerPeer
● Shared ledger,
● Events,
● Smart contract,
● Consensus network

7. Simple Use Case
Technical Advantages
● Mutual Ledger
○ A single source for all messages from any actor to any actor.
○ Fewer point-to-point integrations and batch file exchanges.
○ Metadata source identified in the message itself.
● Distributed
○ Better availability
● Immutable Persistent Messages
○ One agreed source as part of overall Financial Services system upgrade replaces multiple file
archives and simplifies audit processes.
● Real-time(ish)
○ Real-time(ish) settlement, rather than ‘tail-chasing’ batch files and lagging reconciliation.

8. Simple Use Case
Technical Challenges
● Standardization
○ Most firms want to rent the platform, the business applications and the business process.
○ A Business Process Re-engineering challenge for vendors.
● Cross Institution Consensus Mechanism
○ Centralized platform ala clearinghouse.
○ Permissioning for security?
● ‘Mining’ Incentive and control
○ Built into ‘rented’ shared service like clearing houses.
○ BitCoin for all? Is it how you pay the rent?
● Integration
○ Blockchain integration to Systems-of-Record needed.

9. Adoption
Too Big to Change?
● Predicted Large Financial Institution adoption cycle
○ Early Adopters
■ 2016: Demonstration, tutorials, Proof-of-concept systems
■ 2017: Proof-of-concept systems become pilots (low message volume)
■ 2018: Catch on to VC funded accelerators
○ Early Majority
■ 2018: Bank system refresh cycle funding
■ 2020: Funded projects to join emerging communities
● Disrupters - First Movers?
○ Facebook - Google - Amazon (any European or Japanese entity?)
○ Baidu - Alibaba/Alipay - Tencent (China)
○ Developing markets, not Developed markets?

10. Adoption
Single Process
● Verified by Visa - 3DSecure
○ Multiple Acquirers, Issuers and
Schemes - One Blockchain?
● Card purchase chargeback
process
○ FDC + TSYS + Card Schemes
++, One blockchain?

11. Adoption
Single Product
● Peer-to-Peer Lending
● One Chain to Bind them All
○ Multiple Lending Platforms
(brokers),
○ Multiple Investors,
○ Multiple Partner Banks
■ Loan payment processor?
○ One blockchain for greater mix-
and-match flexibility, asset
ownership tracking, asset
transparency?

12. Adoption
Likely Industry Processes
● Virtually all securities processes
○ Trading & settlement, depository, lending, portfolio creation and balancing, securitization
● Global Payments
○ SWIFT rewrite of global payments and settlement systems based on need for more
transparency and better security
● Regulatory reporting
○ Proof of delivery (nonrepudiation) and timestamping
○ Know-Your-Customer and Anti-Money-Laundering
■ KYC and AML components of all financial processes
● Regulatory arbitrage, avoidance?
○ Any process with highly variable regulatory and compliance costs?

13. Simple Use Case
Likely Organizations
● Integrated Financial Institutions
○ “On Us” credit card processing?
○ Bank loan and payment processing?
● Multi-tenant banking platform vendors
● Payment card schemes (Visa, MC, etc.)
○ As trusted blockchain guardian
● Integrated Manufacturing
○ B2B partner negotiation - the old EDI