GFF: To centralise or decentralise? 31 January 2019Luxembourg Reporter: Maddie Saghir
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Moving to a decentralised infrastructure will require keeping an element of trust, a panellist cited at the GFF Summit conference.
Jens Hachmeister, managing director, distributed ledger technology, crypto assets and new market structures, Deutsche Börse AG, said: "If we move from a centralised to a decentralised infrastructure we still need the element of trust especially with regard to gatekeeping, setting the rules and standards, issuing assets, providing know-your-customer (KYC) and anti-money laundering (AML) solutions as well as operating and orchestrating the decentralised networks."
He added: "Decentralised market infrastructure needs to be built on a trusted network environment. Our current thinking is that permissioned solutions do the trick here rather than unpermissioned solutions. In general, trust cannot be outsourced to technology but needs to be provided by an experienced and reliable third party.”
Meanwhile, another speaker said: “Governance, trust and confidence are things that are crucial in any legal interaction but even more so in the financial world. We have different laws in different jurisdictions.”
“When you look at the de-centralised world, the risk is that there are people who know each other and will not transact in this kind of world. How do you create governance around these decentralised models?”
Another panellist cited: “Data confidentiality is crucial for business reasons but also legal and regulatory reasons. If you had a system where everyone could see everyone else’s trades it could lead to problems. There are issues around the anonymity, which lead to questions that have been raised in the early adoptions.”
One speaker noted that a total transformation would take a long time, and explained that this time is not so much of a transformation of technology but of people willing to embrace this technology.
They said: “This industry is a people’s business and people have to want to enact change.”
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