Blockchain technology continues to develop and evolve, with numerous use cases being discovered almost every day. Now, the owner of the Frankfurt Stock Exchange, the largest stock exchange in Germany, has announced that it had set up a new division called “DLT, Crypto Assets, and New Market Structures”. The announcement came on August 30 of this year, and it stated that the division's goal is to use the blockchain technology's full potential to improve the business dealings of the FSE.
The division's managing director, Jens Hachmeister, was recently interviewed regarding the move. During this interview, he spoke about how important the blockchain tech is, as well as the newly-formed team that will explore its options. Additionally, he also mentioned his personal reasons for helping this area grow. The interview has seen Hachmeister answer three burning questions:
1) The Importance Of Blockchain Technology For The Infrastructure Of The Financial Markets
According to Hachmeister, to answer this, we need to understand the perspective of Deutsche Boerse Group, the owner and operator of the Frankfurt Stock Market. From their point of view, DLT and blockchain tech represent a unique opportunity to create new market structures. Additionally, they can allow the creation of new products to the already-existing structures, and enhance the current offerings.
The potential of this technology can cut across the entire value chain. This includes pre-IPO/listing, custody and settlement, clearing and trading, as well as business regarding analytics and data. As always, people tend to expect miracles from the new technologies, and not all of the expectations will be fulfilled. Blockchain has the potential to answer a lot of questions, but that certainly won't include all of them.
Still, it is clear that the digital economy is moving towards decentralization, and the future of marketplaces lies in P2P technology, while intermediaries will become a thing of the past. This is one of the biggest and most important ways in which blockchain can disrupt the infrastructure of capital markets.
2) Why Is The New Division Necessary?
According to Hachmeister, there are multiple market offerings that are based on DLT/blockchain tech. These offerings are already cutting across the value chain of the Group, and the infrastructure of traditional market is already being challenged. He supported this by giving the examples such as funding innovations via ICOs, custody solutions based on blockchain technology, as well as secondary market platforms that are already fully decentralized.
The Group has been rather supportive and active with the new technology during the phase one of its exploration. They invested in multiple initiatives in order to properly understand the new trends, the tech itself, as well as its full potential. However, the fact remains that these explorative steps were not properly coordinated with the entire Group.
3) The Division's Challenges, And Hachmeister's Own Motivation
Hachmeister believes that we are currently at the start of a completely new era, that has a potential to disrupt the entire industry. The biggest challenge that the new team will face is that nobody knows where the path that they are currently on will eventually end up leading to. There are numerous possibilities with this tech, with all of them being equally as fascinating, and providing an excellent opportunity to make great contributions.