Unprepared regulators obstructing blockchain
The reluctance of banks, insurance companies and private
equity firms to invest in blockchain technology is one of the largest obstacles,
according to new research by BrickVest.
Over a quarter (28%) of investors highlighted the
interoperability issues between private networks such as banks and other financial
institutions, and that one party will have to manage all of the protocols. 19%
thought that the scalability of the technology would present a challenge while
18% flagged the operational risks associated with blockchain.
A lack of knowledge and education among industry
participants was also perceived as a further challenge. Less than half (44%) of
property investors claimed to be “familiar” with blockchain and just 2% identify
themselves as “very familiar.”
BrickVest, an online real estate investment platform, believes that blockchain technology can improve the inefficient structures of financial markets. The company is currently prototyping blockchain as a repository system and has filed a provisional patent.
“We believe that that middle man is becoming redundant and
P2P systems that benefit investors are the way forward,” said Emmanuel
Lumineau, CEO of BrickVest. “It is for this reason that we are filing for a
patent.”
A third (31%) of investors felt that blockchain’s adoption
would be opposed by financial gatekeepers such as notaries and trustees whose
existence is threatened by the new technology.
“The main advantage of blockchain is that transactions have
the potential to be significantly cheaper, faster and more transparent,” said Lumineau.
“Decentralised ledgers are able to keep secure transaction records between two
parties, completely independent of any authorities, making tampering with this
record difficult.”
Lumineau added: “There is no one entity that controls
blockchain, meaning that participants can verify the transactions and they are
not forced to rely on one entity to keep track of balances.”
On the real estate side in particular, 70% of property
investors believe that regulators are unprepared for blockchain’s introduction.
Despite the challenges, more than half (56%) of real estate investors believe
that the sector will eventually adopt blockchain technology for transactions.
“Blockchain technology makes particular sense for secondary
markets such as real estate investments and equity crowdfunding, which
previously wouldn’t have been viable due to high transaction costs,” Lumineau
stressed.
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