One of the key sectors to adopt blockchain technology will likely be government regulatory agencies, says Austin Hill, Blockstream CEO, in a recent Bloomberg TV interview. Bloomberg TV host Angie Lau interviewed Hill on “First Up.”
Blockstream has developed a blockchain “sidechain” technology to bringing cross-chain functionality between the bitcoin blockchain and other public and private blockchains. The company recently raised $55 million in Series A funding, bringing the total capital raised in its funding run to $76 million, CCN reported.
Lau asked Hill why people are so excited about blockchain technology. “It’s a fundamental shift in how the underpinnings of how finance work, moving much more to an open, permission-less innovation platform,” he said. He compared it to early Internet innovation. Technology used in bitcoin will be used to rethink the protocols for finance.
Hill said there are several reasons for the level of blockchain excitement. “I think people are beginning to realize that some of the underpinnings of our finance system have not changed in 20 years,” he said. “Wire transfers, international remittances, post-trade settlement, the entire way that banks and finance organizations do netting, a lot of issues around how stock and assets are traded and actually tracked which led to some of the problems in 2008 of systemic risk.”
Tasks that took hours, days, weeks and even months can now be done in seconds, he noted. “We’re changing how the actual ledger works. It offers huge cost savings for financial organizations in the area of regulatory compliance, trust with other organizations because right now there’s a huge amount of reconciliation that has to occur where everyone has their own copy of the ledger and no one agrees.”
Lau noted that Blockstream, at two years old, is one of the oldest blockchain industry players.
Despite all the promise, Lau said that the adoption rate has not been high. Hill responded that the blockchain is in a category similar to that of large ERP systems; the adoption doesn’t happen overnight.
Is he worried about the regulatory environment? Regulators want to remove risk, Hill said. “This technology offers some of the best potential to actually remove systemic risk. And a lot of regulators around the world are beginning to realize that — you know paper money; coins, paper money, may not be the tool we use in 10 or 15 years. And so they’re looking at their own solutions even at the national government level to say if we do support fiat currency issued on a blockchain, what is the right technology to do so?”
The U.K. government recently came out calling to issue the British pound on a blockchain, Hill noted.
Hill is going to Hong Kong, and then to Japan to meet with investors. One investor is Digital Garage, one of the largest payment companies that does loyalty reward points and tracking. “Anytime you have a commodity or a tradeable asset; there are opportunities to build more efficient markets with blockchain technology,” he said.
Blockchain’s latest funding round included Horizons Ventures, AXA Strategic Ventures, and Digital Garage, with participation from existing investors including AME Cloud Ventures, Blockchain Capital, Future\Perfect Ventures, Khosla Ventures, Mosaic Ventures, and Seven Seas Venture Partners.
The recent investment in Blockstream will help it bring solutions via the “extended via interoperable sidechains,” CCN reported. Blockstream’s sidechains are seen as the key to bringing cross-chain functionality between the bitcoin blockchain and other public and private blockchains.
Blockstream made headlines when it announced its first bitcoin sidechain called Liquid. The sidechain is seen as a solution to bring instantaneous and secure transactions to payment processors and brokerages. Liquid will also aid traders and licensed exchanges.
Blockstream also previously announced a ‘strategic partnership’ with services firm PwC, an endeavor with the aim to “bring blockchain technology and services to companies around the world.”
Featured image from Shutterstock.
Last modified: February 23, 2016 18:22 UTC