The European Securities and Markets Authority (ESMA) said on Thursday it is looking closely at the distributed ledger technology (DLT), after an analysis found it was too early to say if blockchain posed any threat to financial markets.
The main focus of ESMA’s interest is whether the blockchain database technology, which is currently used mostly for storing information on transactions with bitcoins and is believed to be almost impossible to tamper with.
“It is too early at this stage to form a definite opinion on whether DLT will be able to address these issues in an efficient way,” the watchdog said in a statement. “ESMA stresses that firms willing to use blockchain should be mindful of the existing regulatory framework.”
At the same time, Santander UK, part of the Spanish Santander Group, has launched tests of a payments app using the blockchain technology of the fintech company Ripple. According to the announcement of the technology company, the bank is rolling out payments as a staff pilot with plans to expand the technology at later date.
The application connects to the mobile and digital wallet Apple Pay and allows payments and international transfers of sums between GBP 10 and 10 000. Other supported currencies are EUR and USD. Currently payments made in EUR can be sent to 21 countries and US dollar payments – to the US. According to Ripple’s co-founder and CEO Chris Larsen, Santander is the first bank in the world to transfer real funds externally.
Santander’s goal is to provide improved and easier cross-borer payments, for less time and a smaller fee, and to enable new types of high volume, low value global transaction. According to an earlier report of Santander’s venture capital arm Santander InnoVenture, the implementation of the blockchain technology would save the banks globally $20 billion a year.
“The need for finance has evolved from providing a physical pound in your pocket or card in your purse, where you pay at a till, to being seamlessly integrated into a new, always on, connected lifestyle,” said Sigga Sigurdardottir, head of customer and innovation at Santander.
“At Santander we work hard to ensure our banking is simple, personal and fair and believe new blockchain technology will play a transformational role in the way we achieve our goals and better serve our customers, adding value by creating more choice and convenience,” she added.
Meanwhile, a survey of Technology Strategies International found that over 2015 usage of bitcoin in Canada has doubled. Still, Japan remains a pioneer in bitcoin use: recently the country’s parliament passed amendments requiring the regulation of cryptocurrency exchanges, thus making steps towards “legalizing” them, while some of the country’s leading online stores started accepting bitcoin as payment.
With the growing interest in blockchain, specialized fintech companies such as Elliptic are attracting million dollar investments and multinationals like Deloitte set up blockchain labs.