What happens when you get a group of Wall Streeters and 100 financial institution executives in one room to talk about FinTech beyond the power of the blockchain?
You get talk about a "digital dollar" and the future of how the U.S. dollar could be turned into a digital asset that could be used to expedite how financial trades are conducted. Of course, that's where the blockchain comes into the conversation, as the chatter on Wall Street has been about how, if and when the blockchain's tech could be used to transform the financial system that many have suggested is outdated and clunky.
But this meeting was all part of a secret event that was reportedly sponsored by Chain, the blockchain startup. And to get the ideas flowing, Fiserv even created digital dollars to be used to show executives what this hypothetical future looks like.
This meeting took place in the Times Square office of Nasdaq — which has also been experimenting with blockchain's tech — and included representatives from Citigroup, Visa, Fidelity, Fiserv., Pfizer and others.
"Nasdaq has been pleased to participate in the development of the Chain Open Standard through a variety of use cases, including private market securities, proxy voting and clearing," said Brad Peterson, executive vice president and CIO at Nasdaq. "In particular, we are excited to be collaborating with our market technology clients on these developments and look forward to our continued innovation in this area."
The outcome of this event was officially announced yesterday (May 2), when leaders who participated in the meeting expressed what came out of it. This included spending 18 months leading up to the public release of Chain Open Standard 1 (Chain OS 1), an open source blockchain protocol
"Visa and Chain have been collaborating to explore how a blockchain architecture can operate at Visa's scale to the benefit of our clients," said Jim McCarthy, executive VP of innovation and strategic partnerships at Visa. "The Chain Open Standard is the culmination of many months of iteration and problem solving, and we are pleased to be playing an ongoing role in that process."
Marc West, CTO at Fiserv, said the "digital dollar" that his firm created for the meeting was to show how an instant debit or credit transaction could occur on a blockchain. But what made the creation of the protocol really matter is that this was "the first time the money has moved," he told Bloomberg.
While it was well-known that Wall Street was teaming with startups to see how blockchain's tech could be tested, the specifics had been relatively unknown at this point. But this meeting, which occurred on April 11, changed that via with the launch of the Chain Open Standard.
But it was done so out of the public's knowledge so that a better dialogue could occur without outside distractions, said Chain CEO Adam Ludwin. This, he noted, was to promote a freer flow of ideas from the executives who could speak openly without it showing up in the press.
“We’ve been quietly building with a whole bunch of folks for a few years,” Ludwin said. “Blockchains are networks, so we think collaboration is important, but what’s even more important than collaboration at the beginning is getting the model right.”
"By partnering deeply on real projects with market leaders across a range of use cases in banking, payments, capital markets and insurance, we have designed a blockchain standard from the ground up to solve problems in a cohesive way. We are delighted to be opening this multi-year effort to the broader financial community today," he noted in a news release about the collaboration.