A grand plan to apply blockchain technology to the world of securities and trade settlement appears to be stalling, with Digital Asset Holdings, one of its key proponents, switching its focus to so-called “smart contracts”.
DAH, previously fronted by Blythe Masters, the former JPMorgan Chase executive credited with pioneering the market for credit-default swaps, had promised to revolutionise finance by applying the distributed ledger technology backing cryptocurrencies to activities such as trade clearing and settlement.
Instead, DAH is ramping up its focus on smart contracts, which use similar code to that used in automated transactions such as direct debits and standing orders. Any blockchain-enabled financial settlement system is likely to be highly dependent on smart contract technology.
The shift comes as Germany’s central bank expressed doubts about blockchain’s potential, relative to existing technologies.
“The market is evolving to a place where we see the ledger platform becoming a place that is going to be very difficult for us to compete in,” a spokesperson for DAH said, adding the group had also recognised that customers were fearful of being locked into any specific platform.
Ms Masters had told bankers in 2015 that blockchain was analogous to “email for money” and that the world should be “taking this technology as seriously as you should have been taking the development of the internet in the early 1990s”.
She stepped down from her position as chief in December 2018 for personal reasons, stirring concerns that blockchain’s promise may struggle to live up to expectations. She remains a board member, adviser and investor in the company.
Other notable departures from the company over the past six months include Stewart Cowan, brought in last April to oversee DAH’s development of a blockchain-based clearing and settlement system for the Australian Securities Exchange (ASX) and Gavin Wells, the former LCH…