The blockchain technology still has a long way to go before it reaches institutionalization according to Joyce Chang, global research chair at JPMorgan Securities. Chang stated that there is still a need for the tech to overcome key hurdles before it can break through a cross-industry adoption at scale.
Sectors Spearheading Blockchain Adoption
Joyce Chang, global research chair at JPMorgan Securities while speaking on the institutionalization of the blockchain technology during an interview on the “Bloomberg Daybreak: Americas” television show on Feb. 7 commented on the sector spearheading the adoption. She noted that the technology is not yet institutionalized but is being spearheaded by industries with particular characteristics — especially sectors where the tech can bring real and immediate backend efficiency gains.
She further stated that these industries rely on cumbersome legacy paperwork systems. Such example is trade finance, and she expects the blockchain tech to have a special impact on the sector in the next three to five years.
Another aspect where the tech has seen growth according to her is the information sharing. She cited the example of the ongoing expansion of Jp Morgan’s blockchain based interbank data network. The network thus far hosts 157 participants bank. She noted that this has moved beyond experimentation. Though it is still in its use case form, it has seen more adoption, especially in Spain and the Australian stock exchange according to her.
Hurdles The Blockchain Tech Needs To Cross
Chang further highlighted some aspects the technology needs to scale before it achieved institutionalization. These include offering the wholesale and cross-industry transformational change. Chang emphasized by stating that;
“How do you get to scale when the very nature of [the technology] is supposed to be decentralized? That’s the catch-22 about blockchain. I think they are still working through regulatory issues, also related to data privacy and security.”
Though the implementation or achieving institutionalization seems difficult, she stated that there is still a need for a specific use case which could hasten it.
Furthermore, she commented on the difficulty posed by some industries to the use of technology. She noted that in supply chain and logistics the challenge of automating data input end to end is considerable.
While the challenge ranges, the use of the blockchain technology to digitize trade document and automate multiple trade finance has become prominent recently. Blockchain-powered trade finance platform was implemented by Standard Chartered, StanChart among others recently.