Banks Don't Implement DLT Due to Legal Issues, - Report

Despite legal issues and extremely high volatility of crupto, banks and other big players continue to experiment with blockchain-based solution
10 June 2019   381

The report of the consulting firm McKinsey & Company states that a huge number of financial institutions are extremely cautious about the blockchain, despite the significant potential of this technology for the financial sector. BTC Manager reports about it.

According to experts, legal uncertainty is a significant obstacle for the implementation of distributed ledger technology in various bank processes. In addition, financial institutions are wary of extremely high volatility of Bitcoin and Altcoins, which are based on the blockchain technology.

Nevertheless, governments, investment banks and infrastructure solution providers continue to experiment with blockchain-based solutions, seeking to reduce various costs, improve process transparency and financial performance.

For instance, investment banks envisage a world where transaction execution, post-trade processing, and settlement are instantaneous, cutting-off numerous middle-and back-office processes. They are also focused on the potential for smart contracts to increase automation.

McKinsey's Report

Report says various financial regulators, including the US SEC and the British FCA, have not yet developed acceptable rules for the cryptoindustry. Nevertheless, despite regulatory uncertainty, large companies continue to invest heavily in this area.

CFTC to Approve LedgerX's Deliverable BTC Futures

At the same time, another platforms such as Bakkt, ErisX and Seed CX still awaiting regulatory approval
26 June 2019   66

Cryptocurrency derivatives provider LedgerX LLC has received a license from the Authorized Derivatives Market (DCM) from the US Commodity Futures Trading Commission (CFTC), which will allow it to launch the country's first bitcoin futures.

Deliveries for deliverable futures are made in the underlying asset, not in fiat funds. Thus, LedgerX outstripped the Bakkt, ErisX and Seed CX platforms, which are still awaiting regulatory approval.

At the same time, LedgerX intends to launch the Omni platform for trading options, swaps, and bitcoin futures for retail investors, since at the moment it does not see enough interest from institutional market participants.

However, it should be added that some experts have already expressed fears that the nature of the license received will not allow LedgerX to provide margin tools to customers, and Bakkt should have such functionality.

Recall about the intentions to obtain the appropriate permission and overtake competitors LedgerX said in April.