Wall Street Finds Blockchain Hard To Tame After Early Euphoria

www.oann.com | 3/7/2019 | Staff
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NEW YORK (Reuters) – Two years ago Nasdaq Inc and Citigroup Inc announced a new blockchain system they said would make payments of private securities transactions more efficient. Nasdaq Chief Executive Adena Friedman called it “a milestone in the global financial sector.”

But the companies did not move forward with the project, a person familiar with it said, because while it worked in testing, the cost to fully adopt it outweighed the benefits.

Blockchain - Person - Mirage - Adoption - While

Blockchain, the person added, “is a shiny mirage” and its wide-scale adoption may still “take a while.”

In a joint statement, the companies said the pilot was successful and they were “happy to partner” on other initiatives. Both companies are also working on other projects.

Companies - Banks - Retailers - Technology - Vendors

Companies, including banks, large retailers and technology vendors, are investing billions of dollars to find uses for blockchain, a digital ledger used by cryptocurrencies like bitcoin. Just last month, Facebook Inc revealed plans for a virtual currency and a blockchain-based payment system.

But a review of 33 projects involving large companies announced over the past four years and interviews with more than a dozen executives involved with them show the technology has yet to deliver on its promise.

Dozen - Projects - Banks - Exchanges - Technology

At least a dozen of these projects, which involve major banks, exchanges and technology firms, have not gone beyond the testing phase, the review shows. Those that have made it past that stage are yet to see extensive usage.

The euphoria that surrounded the early days of Wall Street’s interest in blockchain is giving way to pragmatism, as companies realize that it will likely take years before it takes off in a substantial way.

Transformation - Market - Bang - Hyder - Jaffrey

“This is a transformation of the market. It isn’t a big bang,” said Hyder Jaffrey, head of strategic investments for UBS AG’s investment bank.

It could take three-to-seven years before major projects have significant impact, he said.

Project

One UBS-backed project,...
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