Blockchain – The Wall Street Fixer

Wall Street


Only a few days ago we wrote a story about how ICE (Intercontinental Exchange), the owner of the New York Stock Exchange, was entering the cryptocurrency trading arena with BCG, Microsoft and Starbucks as joint participants. That is going to really shake up “The Street” and open up a whole new world to traders, investors, wealth managers, etc, etc. BUT, now that several rounds of celebratory drinks have sunk in here comes a bit of a sobering article rightly pointing out all the pesky details that need to be addressed. Take a read at reality (but you can still be excited………the NYSE subsidiary “Bakkt” is BIG).

(Bill Taylor/Fintek Capital)


“A ten-ton gorilla just entered the room and it sent everyone scrambling. ICE, parent of the New York Stock Exchange, is entering the bitcoin/cryptocurrency business—both institutionally and for retail payments. ICE’s move throws a curve ball at the crypto industry and Wall Street incumbents alike. So now what? And what does this imply about Wall Street’s enterprise blockchain projects, now that a giant infrastructure player has embraced cryptocurrencies for trading, clearing and settling transactions?

In Part 2 of this series, I’d predicted that Wall Street would try to co-opt cryptocurrencies the only way it possibly could, which is to financialize them by creating layers of debt-based, off-chain claims against them—and two days later, that happened.

The killer app for blockchain on Wall Street was always to migrate over to natively-digital blockchain assets and away from assets owned indirectly (currently, the DTC owns nearly all securities in omnibus accounts and what’s in our brokerage accounts are IOUs owed to us by a chain of leveraged financial institutions, not real stocks and bonds). Plus, Wall Street’s ledger systems aren’t in sync. That’s how situations like Dole Food happen—where Wall Street’s ledgers created 33% more shares than actually existed. There’s no excuse for this, ever. The solution is to scrap the old structure and use natively-digital assets that are issued, traded and settled on a blockchain.

ICE broke the seal. Natively-digital blockchain assets are coming to Wall Street. That’s a very big deal…”


Full Article by Caitlin Long at Forbes.com