Masters: Regulators Warming To Blockchain’s Future

The answer to questions about whether financial regulators will help propel blockchain technology’s potential may come sooner rather than later.

What this means, of course, is that there’s evidence that those financial regulators have warmed up to how blockchain technology could be used to innovate financial transactions, among its other uses. At least, that’s according to ex-JPMorgan banker Blythe Masters, who runs the blockchain startup Digital Asset Holdings.

“Regulators are very interested in the potential of this technology to improve transparency, audit trails, transaction reporting and reduce operational risk,” Masters told Reuters.

Since launching the blockchain startup, Masters has been on a crusade to push the technology’s initiatives across the financial ecosystem, particularly as the blockchain has been viewed as being a more efficient, cheaper and more secure way to move money around the world. Blockchain, however, is the technology underpinning bitcoin, which has brought plenty of controversy with it.

But Masters believes times are changing, especially after her startup secured a $50 million investment round, led by some pretty big financial bigwigs, including her former banking giant employer JPMorgan. Masters has preached that blockchain’s technology could be as impactful as the Internet.

The real pitch behind blockchain, of course, has been that it enables transactions to be shared across a distributed ledger, which can be verified by a network of computers but can be done so without a central body (such as a bank) to verify the transactions. This could impact how financial deals are conducted, including stock deals and legal contracts.

“Distributed ledger technology has the potential to solve real-world financial problems and create operating and capital efficiencies. However, in order to realize these benefits, it is important to preserve the legal and regulatory protections afforded to participants in the existing financial system,” Masters said in a news release promoting the upcoming DC Blockchain Summit.

Because many in the financial ecosystem have agreed that the systems currently used are clunky and outdated, there’s been an influx of attention on blockchain and how it could innovate how money is moved and thought about. But for it to take that next step toward legitimacy, it needs financial regulators behind its mission.

“More broadly, [regulators] hope the blockchain technology can be beneficial to the economy,” Masters said. She also noted that regulators have begun talking more and more about the benefits, which have slowly begun to overtake past conversations about risks.

And getting more players into the mix benefits the technology even more, as Masters emphasized: “The greatest benefits of this technology are extracted if you have multi-party participation.”