A recent poll of senior finance and technology professionals at EY’s Global Blockchain Summit in New York returned some interesting results.
Asked what the biggest barriers to widespread adoption were, the responses were: regulatory uncertainty (61%), integration with legacy systems (51%), and a lack of understanding of blockchain’s capabilities (49%).
The specter of regulation has always hung over cryptocurrencies and blockchain technology. Multiple regulatory bodies could have authority over the industry resulting in a lack of clarity. Those agencies include the IRS, the SEC, and the CFTC.
The poll also echoes the sentiment of the panel that gave testimony to the House Banking Committee in March. That committee oversees the work of most of the relevant US agencies. The hearing focused on ‘Examining Cryptocurrencies and ICO Markets’, so perhaps the regulatory concerns were logical.
For the banking sector, the issue is not just tokenization. Without touching cryptocurrencies, if banks use a shared infrastructure, this has regulatory ramifications. The same goes for trading.
Unsurprisingly then 37% of EY respondents cited changes to regulation as the primary driver for blockchain integration. A secondary driver will be blockchain adoption as a digital currency by top companies (23%) . And in third place is acceptance of the technology by central banks (18%).
Speed of adoption
Respondents expected the US to receive the greatest adoption of blockchain within the next two years (28%). China lagged in second (18%) , with Japan (13%) and the UK (12%) far behind.
The poll also reveals that the respondents expect the financial/professional services industry to undergo significant changes. 60% anticipate that most blockchain breakthroughs will occur in the sector in the next two years. More specifically, 60% expect finance to gradually adopt blockchain within the same period, while 17% foresee rapid adoption.
The areas where respondents see the greatest benefits of blockchain were: increased operational efficiencies (28%), higher levels of transparency (18%), and trust in data integrity (16%).
Paul Brody, EY Global Innovation Leader, Blockchain Technology, says: “As blockchain adoption ramps up, we see four transitions driving the technology’s maturity. These are:
- Transitioning from private to public networks to create an open system for all users
- Shifting from synchronization to tokenization to improve accuracy and reduce risk
- Moving from cryptocurrency to tokenized fiat currency to transfer value on public networks
- Shifting from parallel separate systems to integration with laws and regulation from central banks and governments.
With these developments blockchain could become fully operationalized into enterprises, leading to a surge in applications across industries.”
These results contrast quite substantially with other surveys from Gartner, Deloitte, and PwC. Given the focus of the EY survey was finance, different conclusions are hardly surprising for such a regulated industry.