Blockchain has evolved from being used exclusively for bitcoin (Blockchain 1.0) to also enabling contracts (Blockchain 2.0) to now supporting applications beyond finance (Blockchain 3.0). Major industry consortia like Hyperledger, R3CEV, and others are working on blockchain applications. Blockchains can provide critical operational improvements like reducing reconciliation costs between disparate financial systems from $15-20B by 2022. Blockchain is now being applied in areas like cross-border payments, private securities exchanges, and replacing stock settlement systems to improve post-trade processing.

1. Brief history
What is blockchain ?
Evolution of blockchain
Industry consortia and
ecosystem
Blockchain - Critical
Operational Improvements
Blockchain in FINTECH
 Satheesh Kathamuthu

2. History of blockchain
Blockchain
was
exclusive
tobitcoin
Experimen
taland
obscure
Limitedto
cryptograp
hic
community
Early days
(2009-2012)
“Silk
Road”
High
volatility
50,000
tx/day
Turbulence and
recognition
(2012-2014)
Blockchain
asa
technology

Serious
interest
from
regulators
andbig
financial
firms

VCand
big
financial
institutions
investment
Experimentation
(2014 – present)
Source: Blockchain in Capital markets by McKinsey & Company

3. What is
Blockchain ?
 A digital, chronologically
updated, distributed and
cryptographically sealed record,
of all data transfer activity
 Ease the transfer of value
 unexpected fruit of
cryptography
 Built on top
 Cryptography
 Peer-to-peer networking
 Game Theory

4. Evolution of blockchain
● "Blockchain 1.0" is currency - the deployment of cryptocurrencies in
applications related to cash such as currency transfer, remittance, and
digital payment systems.
● “Blockchain 2.0” is contracts - the whole slate of economic, market,
and financial applications using the blockchain that are more extensive
than simple cash transactions like stocks, bonds, futures, loans,
mortgages, titles, smart property, and smart contracts
● "Blockchain 3.0” is blockchain applications beyond currency,
finance, and markets, particularly in the areas of government, health,
science, literacy, culture, and art.
● Melanie Swan, IEET

5. Industry consortia and ecosystem
 Hyperledger
 R3CEV
 Utility Settlement Coin (USC) 1
 Ethereum
 IBM Blockchain in Bluemix
 Microsoft Azure BaaS
1 https://www.db.com/newsroom_news/2016/medien/utility-settlement-coin-concept-on-blockchain-gathers-pace-en-11661.htm

6. Blockchain – Critical
 Ripple – cross border payments
 Nasdaq is working on a blockchain-powered private market exchange
 JP Morgan built permissioned DLT platform on Ethereum called
Quorum2
 The Australian Securities Exchange (ASX) is developing a blockchain-
based post-trade solution to replace its current system1
 R3 CORDA is in Developer preview
1 https://www.cryptocoinsnews.com/australian-stock-exchange-confirms-upcoming-blockchain-for-settlements/
2 https://www.jpmorgan.com/country/US/en/Quorum

7. Reconciliation - Operational improvements
Typical architecture of systems involved ● One trade often leads to entries in
multiple disparate systems.
● Lack of golden source of truth
● Presents a need for reconciliation
between systems to arrive at an
accepted/unified truth.
● In financial markets, it is estimated
distributed ledgers could cut $15bn -
$20bn from bank’s post-trade
processing costs by the year 20221
Image Source: ttps://jackgavigan.com/2014/04/14/disruptive-bank/
1 Santander InnoVentures, Oliver Wyman and Anthemis Group, “The
Fintech 2.0 Paper: rebooting financial services”

8. Q&A
Thank you.

9. References
The FinTech 2.0 Paper - http://www.finextra.com/finextra-
downloads/newsdocs/The%20Fintech%202%200%20Paper.PDF
 Bitcoin and Cryptocurrency Technologies
http://bitcoinbook.cs.princeton.edu/
Blockchain: Blueprint for a New Economy - Melanie Swan
Blockchain in Capital markets by McKinsey & Company
Embracing Disruption – Tapping the Potential of Distributed Ledgers to
Improve the Post-Trade Landscape by DTCC