The DTCC (Depository Trust and Clearing Corporation) conducted a survey called “Systemic Risk Barometer” on 11 December 2018 and issued a report on the data collected. The survey is done every year since 2013 and serves as an annual pulse check to observe and analyse existing or potential risks that may cause a collapse of the global financial market, or also called systemic risks.
It turns out that FinTech (Financial Technology) such as blockchain technology is not well received by some, as 20% of the survey’s respondents listed the new financial innovation to be one of the top systemic risks the market faces in 2019, which is an increase of 5% from last year. The number of respondents that sees Brexit as a potential problem also increased by 11%. Additionally, 28% of respondents identified “excessive debt” as a new systemic risk the global economy encounter.
DTCC’s Managing Director and Chief Security Officer, Stephen Scharf, stated that the growing number of individuals and parties concern over the FinTech operations is a sign of “growing awareness” and emphasised that the systems introduced by FinTech platforms should be evaluated seriously.
He further added that precautions and preventions need to be implemented so that FinTech such as blockchain, AI (Artificial Intelligence) and cloud solutions do not “jeopardize the safety and security of the current global financial marketplace” as these technologies are more widely used in multiple industries.
The report, however, does not explain how FinTech such as blockchain would disrupt the safety or security of the financial market. Blockchain is a technology created based on the principal of making online operations more secure and harder of hackers to exploit the Internet.
It is possible that the potential of FinTech like blockchain, a concept which is still considerably new, to transition into a major part of the economic world is not well received by parties and individuals who are still unready to adapt. For example, Allianz Global Investments CEO wanted digital assets to be ‘outlawed’ earlier this month during a panel while the head of FCA who was also present stated that crypto assets lacks ‘intrinsic value’.
There are also parties that welcome the technology such as HTC, which released a blockchain smartphone called ‘Exodus 1’ which is only purchasable using cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH).