Blockchain could give regulators total market overview, slash collateral, IOSCO chief says
“The blockchain is coming down the tube fast,” IOSCO Secretary General David Wright told SNL Financial in a late November interview, adding that the technology would almost certainly be discussed at the organization’s next board meeting in February 2016.
“You know who’s bought the particular product, so that’s good from a market abuse perspective, of controlling market abuse,” he said.
Blockchain could solve the problem caused by the failure of the world’s trade repositories to aggregate separately collected data on derivatives as efforts continue to agree on standardized tags for trades, products and parties, Wright said.
“One of the big failures of global financial reform has been the trade repositories,” he said. “In the middle of those 29 trade repository complexes, you’ve got commercial interests, privacy issues, data protection, distrust among regulators and no harmonization of the underlying data.”
Moreover, said Wright, blockchain could slash the need for collateral held against trades.
“If you have a much more rapid system of connecting up an exchange of cash for title, your margin requirements could change because your risks are much lower,” he said.
The full article is available on SNL.com.