Live on Bloomberg TV

00:00Welcome. How's everyone doing. Good morning so far. Right. I GOT YOUR SECOND CUP OF COFFEE. So I think we're ready to plunge into one of the hottest topics in finance in the financial services world right now which is not necessarily bitcoin but the block chain just to show hands if I may. How many people here have heard of the block chain. Know what it is. Are familiar with its capabilities and so forth. Good. OK. So that's pretty good . Well you know the block chain is the technology that underpins bitcoin. It's what enables me to send to you bitcoin and you receive it. And it's it's valuable and it works and it's all done without a third party intermediary. So it's it's a revolutionary technology. And in this session by the end of this session you are all going to understand what the block chain is. It's potential for changing banking the way securities are settled and recorded in the capital markets and the way payments are sent around the world through the existing financial system . And I realize that that's a that's a tall order maybe a little hyperbolic but I have absolute confidence that we will hit that goal because of the four gentlemen sitting up here who are each of them working in the heart of the block chain moment right now . And I'd like to introduce them to you starting with John Moton us at the far right at the end here. John is a founding board director for the Bitcoin Foundation and the foundation is a three year old organization that is set up to standardize protect and promote the use of bitcoin for the benefit of users worldwide. So we all know that bitcoin has no master but this organization is designed to kind of bring maybe a sense of order or at least a place where debate can take place and somewhat orderly fashion and say the forum forum. OK. Very good. Next to John is Richard Kendal Brown. Richard up until about two weeks ago was the Executive Block chain architect at International Business Machines which I'm sure you've heard of. He worked at IBM for 15 years. And two weeks ago Richard made the jump into our three. I don't know how many of you have heard of our three but our three is a new consortium of banks Goldman Sachs Morgan Stanley UBS Deutsche Bank the list goes on. These banks have come together to try and figure out how to harness the block chain in a variety of different forms. Richard we're so pleased to have you. He's in the belly of the beast. You could say right now Daniel Maravich sits right next to Richard. Daniel is a former CTO at Deutsche Bank in its investment banking unit. He has kind of moved you have a very interesting career you've moved in and out of startups and then back into banking. He is now the president of European operations at Earth port. Earth port is a London company that is designing a cloud based alternative global payments system to Swift. I think most of us have heard of SWIFT have dealt with swift either in our business lives or just our consumer lives. Daniel is now working on how the block chain might fit in reorganizing global payments which is like the lifeblood of the global economy. So it's pretty huge. And we have Oliver Boston right next to me. Oliver is the CIO of UBS. Oliver has led a really groundbreaking campaign in the banking world to recognize the potential of the block chain. Last October about a year ago this time it was Oliver who came out with a very absolute statement rather jarring for somebody in the banking world to say that the block chain is going to change everything. It's going to change banking and that got a lot of attention. I think your Twitter account exploded at that time got a lot of attention. And Oliver has now driven the creation of a block chain accelerator at level 39 which is at the top of one candidate square if you ever get a chance to get up there you should go it's like the heart of the FinTech movement in Europe not just the U.K. And Oliver's team up there and already experimenting with using the block chain. The distributed ledger to do all sorts of banking needs including the issuance of bonds which we're going to hear more about later rest assured that if the chain still seems a little fuzzy to you right now in our conversation you're going to come to understand what it is. I mean we're not going to start writing algorithms on the board or we're not going to get really technical and go into the weeds here. We want to understand the business impact of this but these four guys by the end of this year are going to know this is what this thing can do. And I'd like to begin with Oliver. I mean a year ago at this time how can we have the bitcoin price chart up a year ago at this time. Banks wanted nothing to do with Bitcoin. Bitcoin was associated with crypto anarchists and money laundering and all of this sordid stuff and go. Why would banks want you know anything to do with that . But a funny thing happened. A funny thing happened at about that time where the block chain became separated from Bitcoin as a possible revolutionary technology. Tell us take us back to that moment and tell us about what you saw and how that drove all of the things you've been doing in the last year. I've been through almost 18 months of steep and massive learning curve and it was triggered by an interjection of such a multitude which had also one of the ethics entrepreneurs were talking about setting up an ethics marketplace spreading talking about the concept of all that you do trading and settlement of X transaction within minutes instead of usually it takes two days two to execute a trade to settle in clear that triggers a lot of effort on the production side settlement risk market risk and it could be convinced in a few minutes. I'm not talking about bitcoin because they can't just using this distribute lecture or block trade and that triggered a lot of interest on my side . I've put experts together to to challenge that is it possible to do that in a few minutes instead our base and we came to that in the summer 2014 to the conclusion that yes it's possible. And at MIT my statement and I test drive the statement as a bit in my previous job also also a social we have to see how the world is reacting to that. And that was the statement Walter journal in October and the direction over as you said about Twitter. I think there was an interesting very very a very viral and for me clearly that for me an indication to spend more time and effort and resources. So we built a team focusing on that topic on blocks and I was very clear to differentiate between Bitcoin and Shery Ahn to figure out what are the use cases. What other technology out there. And then we build the team and we decide to go for something else I think it's big in the industry now to set up a lab outside your own premise to team up with eleven thirty nine hundred eighty startups out there open ecosystem . You have to be part of that. There should be no reason to reach out to you know invitation you knock on the door of our lab and you'll be in and you have to be part of that coloration and that message that we did was level thirty nine in April was another confirmation that was highly discussed across the different social media channels. And then watching my peers understanding the difference between blog Shery Ahn and bitcoin and coming out of the World Economic Forum's study that out of the eleven innovation spaces payment lending investment the luxury top of the distributed application is the number one topic that everybody likes to spend more time and resources together. For me fascinating story. Our starting point for me there is much more to come. Richard just take a moment and explain to us just a bit about the architecture about the separation between watching and Bitcoin. What is it about the block chain that got Oliver so excited to look at these possible use cases in banking so so so. So I don't know what we've got all of our interested but with the the insights to the extent it is one for me was probably at the back end of last year and the start of this year I've been writing and speaking about this space for some time and the question I was wrestling with was exactly is this has just been discussed there's this there's been this prevailing belief I guess for the last year or so that it is somehow possible to separate the idea of bitcoin from the idea of the block chain. But if you go back to the the problem statement that Bitcoin was designed to solve you know put it very very simply that the designer or designers of bitcoin were trying to build a system of censorship resistant digital cash you know digital cash that you could hold just like physical cash that no one can take away from you and you can sell it to anybody and the entire architecture of bitcoin flows from that. So that's interesting and it's a very clever architecture. But last time I checked banks have legal obligations to seize forms of terrorism block transactions to to bad people. So so why would this technology be of interest to them if they can't or don't have the belief system that underpins it. And me to get to your question about the technology. The key for me was as you look at what is common in a lot of these block train platforms there are three very high level really interesting characteristics . So it's technical but I think it's important 2 to the surface it . The first is they're based around this idea of shared ledgers . So today every bank has its own ledger and every bank has to talk to every other one you have to reconcile and you have to deal with all the breaks. These these fluctuate systems are based on a ledger that is shared between firms or is shared between actors. So there's one authoritative source of truth but that's different to how we build systems today. And it's potentially a more efficient way of building systems for any given any given asset class. The second briefly is the idea of cryptography as a as a fundamental building block. So whereas simplistically today we built that was simplifying. Today we build systems where we know we have databases and we have a password on the outside. And we hope no one breaks in and we secure everything at the perimeter. These block chain systems assume as a given that people are going to try and break in and they are going to be able to succeed at the edges. So we'll have cryptography built in from the start and then the third aspect that is common to these platforms that is really quite tantalizing from a financial markets and financial services perspective is the idea that when you record agreements with people you don't just record the fact of the agreement Io 10 pounds to you. You can also include some business rules. The the the the details of the arrangement and under what circumstances can you pay on that money. In what way is it encumbered. And if you look at how we enter into agreements say in the derivatives space with counterparts today quite often the thing we agree on is some facts. But then we've got our individual systems that have got our interpretation of how the rules should be applied. And then we have to deal with the fact that they're simply difference in the cash flow calculations aren't quite right. So you bring those three things together the shared ledger the cryptography the combination of data of business logic. That's really quite potent combination as we look about look into questions of how we drive simplification cost reduction risk reduction error reduction across multiple multiple asset classes well John Bitcoin though was never designed to do all of these things that bankers and traders and clearinghouses are now looking at. How did this happen. How did how did suddenly the block chain be applicable to all of this and what does the bitcoin community think about this. I mean the original use case Bitcoin is now being dismissed and saying well that's not really the innovation the innovation is this right. Right. Well I mean just just as with Richard I do a lot of work in the space as well with Bitcoin with financial institutions and with the ecosystem in general it has always surprised me and bewildered me in some ways why the otherwise smart intelligent I.T. executives and fintech executives view the block chain as a product like you would just take it off the shelf somewhere. It's not an off the shelf product. The block chain is actually a byproduct of a native token native token with network effect that powerful network effect and that native token being Bitcoin. So if we could just use a little bit of level setting because there were more than half the people I think in the audience that weren't familiar with block chain when we're talking about these topics there's capital B Block chain which is the primary Bitcoin block chain which is the largest and most secure of the global block a global block chain networks. And the original one. And then there's small B Block chain which is typically referred to as a private block chain or a permissions ledger or a permission block chain. Whereas the bitcoin one has permission lists. Let me just interrupt just right there. The private block chain that's what Wall Street and the city would use to do whatever it is they want to do on this ledger they don't want to go on the public when the bitcoin one because it's kind of transparent their clients would never go for it. But here's no here's the point. Edward on that is that I think Richard would agree with me on this is that it probably at the end of the day is is not totally resolvable. And the reason it's not totally resolvable is because we look we look at it in different ways. I believe that it's a fundamental failure on the part of some banks and financial institutions to to look at the Bitcoin opportunity and the block chain opportunity is something that can be usurped and brought in-house and you can disrupt yourself from within the way that the bitcoin ecosystem in the way that the disruptive innovation people in bitcoin think of this is they view the bitcoin block chain as a fundamental building block of the Internet. So it's similar to TPP. It's similar to S.M. for transporting email messages when you view it in that way then it's very clear that as a value transfer protocol you do want to have a primary global method for a value transfer protocol because of the openness and the enhanced security that it creates. If you don't have that then you have really just recreated the system that you already have today. Daniel we're going to get to you but Oliver I just want to see if you want to jump in here and address you know our banks really going down the wrong path as John is suggesting by looking at private black chains and now I think I think the game is still open I would say that over over hundreds and more suffer development companies out there try to optimize the public ledger from a security perspective from scale. And at the end it comes down to now. What is the platform that everybody can trust is that scale in there. Are there enough market to play as part of that that discussion banks territory players regulators. Because it's all about can I move business on that platform because banking stands for trust and value . And and from that perspective we are on a very very early phase . I would say that the race for my perspective is still open and there's a reason why folks on from a US perspective we put all our eggs in different baskets and and see how this will evolve over the next 12 18 24 months. And maybe it just isn't very very quickly. I mean there's these these these questions though I would argue unanswerable at this point these are empirical questions we will find out as all of us in the next 12 to 18 months whether those of us who are looking at the underlying technologies and are being inspired by that to solve problems in banking right or whether the admittedly and truly disruptive aspects of things like bitcoin whether they're there where the where the value lies or maybe actually both can succeed and proceed in parallel but that is an empirical question. It's very it's very early days. But one of the use cases that already looks really promising is payments where if you're working with Daniel and feel free to jump in Yeah I think I'll take it from a couple of different angles. So the core report product is about using locally C H S as a mechanism for cross-border payment and effectively as a as a new structure or a new reuse of an existing structure to combat the correspondent banking system which has existed for 40 years and is fraught with with problems and costs and in transparency and when we started to explore what we would do with with block chain a distributed ledger and we were meeting with lots and lots of banks you know many many banks and the kind of global top 50 and the conversation always goes exactly like this right . So I've had this exact same conversation maybe 40 times with it with a senior person in the bank and it goes something like this. Are you guys interested in in in distributed ledger blocks. Yes yes yes we are. And then invariably the banker then says because they've been trained in this sort of Pavlovian fashion they say Bitcoin bad luck charm good and they smile because they know that's what they're supposed to say. They're not sure why they don't know what any of it means but they know they're supposed to say Bitcoin bad luck and good and they feel like some compliance officer who's watching my CCTV has breached the site. So so that's the first thing. And so you say Oh that's great. You think this technology is really important . So what are you doing about it. They say well we've set up a lab and. And I say Well have you hired somebody with with tattoos and a fantastic beard. They say yes he's amazing. His name is Steve. You should meet him. He looks great. He said wonderful that's an ego that's absolutely inextricable part of this whole thing is to have somebody tattooed and bearded great . So then the next piece as well has the stuff in the lab gone well I mean the experiments going well amazing. It's been incredible terrific. OK. That's great. So one last question are you clear on how you're going to take your very positive successful experiments the lab and move to doing a transaction where like real money goes from a real individual or real company to another real individual or a real company somewhere in the world then they then they look at you blankly and they repeat Bitcoin bad luck and good and so and so that so. So that's what we started to work on was to say OK look I don't think there's a huge amount of debate that there's incredible interest and you know I don't know exactly what the you know what the sort of volcanic global reaction was about a year ago where this went from we don't care it's happens harder to this and crypto. We need a story. All of a sudden it's important that if we don't have a strategy my CEO is going to beat me with a stick. Right. So that happened but then the question is how do we go from being really interested focused and thinking this stuff is transformative to doing something real. And that's where we've been focused and I think it comes back to a couple of Richard's points which is that you know at the end of the day the regulators don't care about technical innovation. They care about regulation. They care about making sure this compliant response to the framework that they establish. And so the conclusion that we came to earth was that you know what. It's important to engage with regulators and engage a central banks and we do that. And I know that everybody here well you get the regulator bit is really important. I mean that's a major challenge. So let's say this private public block chain the question gets solved in some way that's viable and there's actually like transmission of of of value there's securities there's bond. UBS is putting out bonds on the block chain . What do the regulators do today just like stop this thing immediately. I mean all of see what I have from my perspective I think we have to distinguish because yes there's a real to take responsibility policy making. But but what we see is more and more regulators are setting up a business development function like the MLS like FCA or Hong Kong and Singapore and Singapore and tried to set up an ecosystem that brings banks startups and the rigor is part of that especially the block area because it's all about collaboration finding the standard and because they believe the rules really believe that setting up an environment reduce uncertainty and and be part of their learning queue to come up in an older stage about policy to manage the risk and limitation will attract business at the end because that's one cause that's been real. I mean this is because the block chain creates transparency and the regulators like that . I think multiple things so the transparency I think definitely this idea of a senator is talking abstract terms this idea of a ledger that is authoritative for agreements between multiple firms and which is shared between them. Well one of the organizations with which that could be shared is the regulator . There's a legitimate need to know. So that's why the Bank of England is actually. Well there you heard aging research so you go a step further though. So there's so there's the there's the transparency piece. There's also you could argue it's a systemic risk argument which is if you know for sure that your your recording of a deal is the same as your counterparts and there's no ambiguity no that risk you've got slightly different views of it. That's quite important. And the regulator wants to know that. But even the regulator likes. Absolutely. Yeah . But then you look at whether you it's coming under things like things like the Bank of England that you know the thinking is really quite subtle in advance. So it's free to download one bank research agenda from the Bank earlier this year. They have a digital currency sitting they've actually got a staff who's taken a digital currency Manager Digital currencies team and you know it has all jobless which is a great in the notes directory . He's also the director of banknotes. Yeah. Yes there's something beautiful about it and he's not engaging in arcane things about you know a system such as Egypt digital currency money or what does it mean for the money supply. They're engaging with really interesting topics such as if you had one of these showed ledges that recorded the applications of multiple firms and entities what would happen if a central bank issued that currency Tidjane Thiam on today's show you now had central bank money available for settlement with finality on a shared ledger rather than having to use usually RTS directly . Similarly some researchers in the US these are just research questions they're not proposing to do it but they are thinking out loud about this and they're asking you what would the benefit if it happened. But at the end as a result there because the benefits and potential benefits are huge. They have forces in place for many years four hundred years plus and changing the messages between the different parties to say you know where's my money victimise security et cetera. And it takes time and if you're massively simplify that is pointing to that lecture it's that real time topic it's an efficiency play it's minimise minimized settlement and market risk. Now you can create something that usually you cannot treat for two days for example and then also from the counterparty risk perspective . So there are significant benefits out there that everybody try to utilize to get a extracting value of that. So my understanding understanding is there is a race at the end is figuring out from a technical validation of what is possible what's the best solution out there. Second phase is to be already in there in teaming up with our other players like other banks and then also part of that is regulation it is because if we go through that technical validation of business validation is what are the policies to make it happen at the end and in that moment that you know those kind of teams will try to paralyse as much as possible. That's the winning team at the end. But let let's be clear on this though because the cost savings and the efficiencies and everything that we're talking about are still very very theoretical. I will tell you where the actual cost savings are low the actual cost savings that we're seeing is when the R3 project went from nine banks to 15 banks to 22 banks they can spread the cost of a pilot. Banks can you know over twenty two different banks. So that's where some cost savings is in the piloting and the experimentation that the end result you're saying might not well. It's somewhat funny because I was reading an article the other day and I'm I'm not sure which publication. So I can't say if it was Bloomberg or not but it was they quoted the Depository the CEO of the depository trust clearing corporation which in the US is the the clearinghouse for securities and he was welcoming and embracing this whole decentralized platform for private bar chains not realising that if it's successful he's going to be the one who's disintermediation. So everybody is all euphoric about bringing in a private block chain. But nobody's sure who is going to be disintermediation yet. And then the consortium model. I mean when it comes to innovation and groundbreaking innovation let's be honest I mean the financial industry isn't exactly doesn't have a stellar record. I mean we look at Swift and the problems the antiquated problems that we haven't Swift. I mean is there reason for concern that you know that a consortium model really will solve the block chain and be able to make it real and make it work. So maybe so so I have not what all three is or why we're doing it or why I was encouraged to see a decision from IBM and the the the the the the driving thought or the insight that attracted me to it was ise ise as I outlined the three pillars earlier. If this space is anything it's about individuals and organizations coming together to share infrastructure rather than having their own. They didn't have to integrate reconcile with all the complexity. So that's the case then. Exactly to the comment earlier about adoption and realizing the benefits. You can't drive this as a single family a group of organizations has to agree to move to it or at least move to it in principle. So. So as I as I looked at what my my clients were doing to my banking clients we're doing with individual startups are lots of very interesting projects happening but there was no vehicle I could see to to allow firms legitimately to work together to explore this the research together and share their learnings with the broader community because there were specific requirements that banks have that many different social platforms don't currently address say around privacy or performance. So activism as a way to to to to share that more broadly and frankly then drive towards a platform that that affirms the banks can can move two together so that the idea of working together was the attraction. You right. But there is a there is an obvious but important to mention. You mentioned that you know the cost for market entrants. I think I believe it is much lower than 15 20 years ago because you have that market infrastructure extension that the Internet at the end that distributed ledger would become . And if I look at the way how we approach it the use cases that we built on top of that we have to figure out what financial products we can model not. One of the business logic to to execute those trades and settlements at the end. So it's a totally different way. How are you set up and model business in the future then today. That requires a lot of capital expenditure today. So I believe there is a big change. Daniel what's the tipping point . Well I think I think there are a couple of pieces on the one hand there's a lot of there's a lot of attractiveness of a consumption model because we know that in banking. Banks tend not to do something alone. And because even though there is intense competition whether it's in foreign exchange whether it's in commercial banking and payments whether it's trade whether it's in securities trading and ultimately clearing and salvage which is actually where a lot of the money gets made . There's competition. But at the same time it's the banks that are trading with each other right across all these various instruments and so there's a lot of attractiveness I guess to the consortium model to try to say look let's move together . And therefore there sufficient critical mass for there to be something substantive and meaningful. If we get there on the other hand I think that the part that's complicated is that banks are working at radically different speeds around this stuff. And I think there is the danger that a bank wants to be seen to be a part of the consortium to be seen to be part of the consortium and not necessarily contribute in a way that's very meaningful either monetarily or in a in a genuinely participatory way to move stuff across some ledger and actually integrate and try transacting whether payments or securities whatever. I think that that's the challenge. I think we've taken a very pragmatic view which is that you know it's great that the bank of England and I guess it was the St. Lewis branch of the Federal Reserve United States which wrote a wonderful paper you know Singapore Hong Kong was something fairly you know on the front foot around this stuff which is great. But I also think you know to anticipate that the regulatory regimes around the world will fully incorporate all of the impacts of these changes and give banks what they're in some respects begging for which is absolute final clarity around what they can and cannot do. I think we're dreaming if we think that's going to happen anytime the next five years. So the way you have to survive and be able to actually get moving. And I think we should all get moving and begin transacting and doing some of these things the only way that's going to work is if you find a way to match the existing regulatory requirements with the challenges of these new technologies. Now that's not easy but there are lots of ways to solve for it. And I think if we try to solve for that the various CEOs of startups and the CEOs and CEOs of banks and other people are going to run around to convince regulators to focus on this and issue a decree about it we're absolutely dreaming. The only way it's going to happen is if we work in a way which is compatible with existing regulatory norms. And I think it's not easy but possible and that's part of what we're focused on. But I think we're going to go to the floor for some questions and while we get the mike ready. Daniel Daniel if the consortium approach is the correct approach. Why not. I don't know what it's like. Well no but you said it was so little . Why not just enlist swift or the existing consortiums to push out a private chain and set the standards or is swift the objective to be eliminated in the R3 experiment so I don't have any objective to eliminate anybody but if the consortium There's already several consortiums available we go over why can't they pushed out a private block chain look and I think maybe they will. Maybe they will. I also think that Dax be swift. Swift is a not for profit. Their jobs disturbed the banks. They're owned by the banks and I think if they see enough of the banks moving this way it's not at all impossible to imagine that swift decides to get busy in the space because they have connectivity to eight thousand institutions already . Look we have a question on the side of a room over here. Please go ahead sir. Hi I'm doing from peer to peer partners. Thank you Richard for breaking it down into three legs of innovation and I was struck by your comment about the third leg the incorporation of business rules. So there is a very big dichotomy. The question is to all of you but there's a big dichotomy between talking about Bitcoin as innovative and yet everybody talking about it making things simpler. So there's a big dichotomy there. If you're going to be bringing business rules into settlement of contracts you're increasing complexity and you're basically talking about putting state contingency into things like debt contracts which will massively explode and make more uncertain the complexity of the space. So you briefly briefly touched on by John that the nature is going to be constrained entirely by the regulatory constraints so is it all. Where is the. Well basically I even be able to change debt contracts and make them state contingent and then it's not going to impose too much racket too much complexity on the system. This question is maybe just really break the ice so of the three pillars. I think that the idea that there's this new new newbie like and newly emergent idea of moving the business rules out along with the data. I agree with you there . There are a lot of devil in the details that have to be worked through. So. So I don't want to give the impression that that's a social problem is a lot of complexity as other this gentleman right in the front here but the idea I mean the idea there is really fast. It's one of most fascinating parts of the whole block chain proposition is that you create these smart contracts and the linear process that we now have all gets compressed into the moment of creation of the contract. And you're right. I mean just the complexity of that process is something that these four gentlemen a lot of other people are just you know racking the brain and the legal jurisdictional question implicate certain operations. Michael Parsons of HCM technologies London. Question for John Morton US and possibly Richard Brown and anybody else wants to answer the question . The first and only true iteration of block chain is in bitcoin and that is a public decentralized ledger. And the banks are now looking at a different iteration of that private block chains. And the reason for that I think is because they can't trust billions of dollars worth of assets on a public block chain because the people that can join the block chain do the mining are not permissions. Anyone can join the block chain and anyone can mind. So they're very worried about that plus there's the issue of the 51 percent attack. However by doing that you you void the main one of the main planks of a Bitcoin which is the trust list. Trust us currency trust us. BLOCK chain and you have to then start trusting validators or trusting someone who will control the validators and give them permission . The Holy Grail I see it as an ex bank myself is to move towards a public decentralized block chain and a public decentralized digital currency with the bank of England is looking at this moment as we speak. I put it to John. I mean is there a way that we can square these two just the round peg in the square hole and perhaps start off with maybe private loan chains and then move them to the bitcoin block chain or maybe even have a sign chains on the main picture and block chain and link the two together or we're going to have an Internet or block chains or block chains connected. It's a very complicated question. Well and there is no answer and the answer is as Richard will say it's going to be empirical. We just don't know if if decentralized if decentralized public ledger is ultimately the goal then then I think you square the circle by looking at the banks ultimately rolling out what I think you're just going to be more and more all points now banks don't realize this yet. But they are they are really starting to just build up coins. Now when the realization comes that they're going to need a global immutable platform with the security the unparalleled security of a native token like bitcoin then it will be more accepted and it'll come into realization. I don't think it's a bad thing that banks are experimenting with block change because it's a it's a precursor to understand the knowledge to be able to be let's say capital B Block chain ready because they would have already had the understanding with within the institution and then with respect to the validators a permission list. BLOCK chain with unknown validators is not necessarily as as dangerous and scary as you might think because any kind of mischief would be easily detectable on the network they're performing a security function they're performing a proof of work algorithm and it's purely based on math. So the the collusion and the corruption that we see in some parts of the existing financial system is not possible on a decentralized capital B block chain. Well I think we're gonna have to leave it there as you can see I'm sorry if you don't have time to get your questions but perhaps after the session you can see that there's a lot of ground to cover and I just want to thank you all for attending I'd love to thank the panelists John Morton us Richard Randall Browne Daniel Maravich s and Oliver basement thank you very much .

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The Future of Finance: Blockchain in the Banking Industry

Fintech firms are growing fast and attracting more and more customers as well as investors. How can traditional banks sit side-by-side with fintech? Bloomberg’s Ed Robinson speaks with Daniel Marovitz, President of Europe for Earthport, Richard G Brown, Chief Technology Officer at R3 CEV, Oliver Bussmann, Group Chief Information Officer & Group Managing Director at UBS AG and Jon Matonis, Founding Board Director at the Bitcoin Foundation. They speak at the Bloomberg Markets Most Influential Summit in London. (Source: Bloomberg)

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