The World Payments Report 2018 published Oct. 16 has found that distributed ledger technology is not currently capable of meeting financial market demands.
In the report, the authors address challenges facing DLT adoption.
The report also stated that DLT innovation and projects were often confined to research labs or to the proof-of-concept stage.
A lack of interoperability between DLT and banking systems purportedly stymies the implementation of scalable solutions.
"Multiple DLT systems create a fragmented market with limited connectivity between solutions, which leads to inefficiencies and limited adoption," the report further reads.
Per the report, the legal risk for DLT is represented by an uncertain regulatory environment and a lack of legal frameworks in most countries.
The report cites a three-year experimentation with DLT by De Nederlandsche Bank, saying that "In its current state it [DLT] fails to meet the very high demands of a financial market infrastructure."
DNB further states that DLT could replace some market infrastructures, including interbank settlements and cross-currency transactions.
The issue of whether blockchain is scalable enough to meet certain market demands has been of concern to many industry players.
The DTCC notes that the study only tested basic functionality, stating that subsequent work must determine whether DLT is able to meet resiliency, security, and operational needs.
World Payments Report 2018: DLT Falls Short of Meeting Financial Market Demands
Published on Oct 18, 2018
by Cointele | Published on Coinage
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