ADVERTISEMENT
  • News
  • Technology
  • Culture
  • Entertainment
  • Sport
  • Travel
  • Music
  • More
    • Politics
    • Lifestyle
    • TV
    • Games
Tuesday, May 30, 2023
  • Login
No Result
View All Result
NEWSLETTER
FINCHANNEL
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • America
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • CityLife
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • America
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • CityLife
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
No Result
View All Result
FINCHANNEL
No Result
View All Result
Home Economic

If a blockchain became more critical to the financial system, how should it be governed?

by The FINANCIAL
December 21, 2022
in Economic, Finance
0
Blockchain technologies have potential to add $1.76 trn to global GDP by 2030
Share on FacebookShare on Twitter

The FINANCIAL — Distributed ledger technology (DLT) could reshape finance. But current approaches to how some blockchains (a form of DLT) are governed pose questions about the level of responsibility, accountability, and control relative to existing critical financial infrastructure according to Bank of England.

ADVERTISEMENT

Financial services could be reshaped by a range of new technologies, including DLT. DLT and programmable ‘smart contracts’ may enable a different – potentially simpler – network of relationships in financial markets, which could bring a number of benefits including greater efficiency and enhanced resilience, if the technology is governed effectively.

Blockchains – a subset of DLT – underpin cryptoassets. As of mid-December 2022, cryptoassets had a total market capitalisation of around US$850 billion. Ethereum is the blockchain that hosts the most crypto-related activity: it hosts around 4,400 Opens in a new window different tokens with a combined market capitalisation of around US$380 billion, it accounts for over 60% Opens in a new window of total value locked in decentralised finance protocols, and it processes around one million transactions Opens in a new window per day.

RelatedPosts

Humana shares on the up as earnings show Medicare growth

IMF: Switzerland is facing a more challenging environment in 2023

China: Domestic and External Conditions are Leading to a Weakened Economic Outlook

EBRD and FAO mark 25 years of cooperation with US$ 5.5 million initiative

According to Bank of England.  Ethereum is an example of a ‘permissionless’ blockchain, meaning participation in the network is not controlled by a central entity. In addition, anyone can propose changes to the network, though broad consensus among users is needed for changes to be implemented. By contrast, a ‘permissioned’ blockchain has a central entity that controls the access and privileges of network participants.

In September, Ethereum underwent a major operational event known as ‘The Merge’ Opens in a new window, which transitioned the blockchain to a ‘Proof-of-Stake’ consensus mechanism (more information at ethereum.org). The Merge represented the culmination of years of planning and testing by a group of core developers, co-ordinated by the Ethereum Foundation Opens in a new window (which plays a prominent role in the network but does not control it).

The Merge highlights a range of questions about the governance of permissionless blockchains. The event posed a number of operational and technological risks, and hence raises question, including: what if it had gone wrong? Who would have been responsible for, and had the authority to, co-ordinate a timely solution? Who would have been accountable/liable for any financial losses incurred by others as a result?

In the traditional financial system, critical financial infrastructure is regulated to deliver an appropriate level of responsibility, accountability, and control. In the future, critical third parties providing material services to the UK financial sector (eg cloud service providers) may also be subject to regulatory requirements. So, there is a question as to what appropriate regulatory oversight of a blockchain could entail, were it to become a more critical piece of infrastructure in the financial system.

Blockchains do not constitute critical financial infrastructure (yet). But they could conceivably become so in the future if cryptoasset activity and its interconnectedness with the wider financial system continue to develop. So, it is important that relevant authorities find legal mechanisms and means of co-ordinated action to ensure that an equivalent regulatory outcome is delivered.

Distributed ledger technology (DLT) could reshape finance. But current approaches to how some blockchains (a form of DLT) are governed pose questions about the level of responsibility, accountability, and control relative to existing critical financial infrastructure.

inancial services could be reshaped by a range of new technologies, including DLT. DLT and programmable ‘smart contracts’ may enable a different – potentially simpler – network of relationships in financial markets, which could bring a number of benefits including greater efficiency and enhanced resilience, if the technology is governed effectively.

Blockchains – a subset of DLT – underpin cryptoassets. As of mid-December 2022, cryptoassets had a total market capitalisation of around US$850 billion. Ethereum is the blockchain that hosts the most crypto-related activity: it hosts around 4,400 Opens in a new window different tokens with a combined market capitalisation of around US$380 billion, it accounts for over 60% Opens in a new window of total value locked in decentralised finance protocols, and it processes around one million transactions Opens in a new window per day.

Ethereum is an example of a ‘permissionless’ blockchain, meaning participation in the network is not controlled by a central entity. In addition, anyone can propose changes to the network, though broad consensus among users is needed for changes to be implemented. By contrast, a ‘permissioned’ blockchain has a central entity that controls the access and privileges of network participants.

In September, Ethereum underwent a major operational event known as ‘The Merge’ Opens in a new window, which transitioned the blockchain to a ‘Proof-of-Stake’ consensus mechanism (more information at ethereum.org). The Merge represented the culmination of years of planning and testing by a group of core developers, co-ordinated by the Ethereum Foundation Opens in a new window (which plays a prominent role in the network but does not control it).

The Merge highlights a range of questions about the governance of permissionless blockchains. The event posed a number of operational and technological risks, and hence raises question, including: what if it had gone wrong? Who would have been responsible for, and had the authority to, co-ordinate a timely solution? Who would have been accountable/liable for any financial losses incurred by others as a result?

In the traditional financial system, critical financial infrastructure is regulated to deliver an appropriate level of responsibility, accountability, and control. In the future, critical third parties providing material services to the UK financial sector (eg cloud service providers) may also be subject to regulatory requirements. So, there is a question as to what appropriate regulatory oversight of a blockchain could entail, were it to become a more critical piece of infrastructure in the financial system.

Blockchains do not constitute critical financial infrastructure (yet). But they could conceivably become so in the future if cryptoasset activity and its interconnectedness with the wider financial system continue to develop. So, it is important that relevant authorities find legal mechanisms and means of co-ordinated action to ensure that an equivalent regulatory outcome is delivered.

 

Tags: blockchainetherium
ADVERTISEMENT
The FINANCIAL

The FINANCIAL

Since 2005

Related Posts

Humana shares on the up as earnings show Medicare growth
Business

Humana shares on the up as earnings show Medicare growth

by The FINANCIAL
May 8, 2023
0

Humana Inc. shares have been on the rise recently amid an earnings season that has generally boded well for managed...

Read more
World Bank Group, Switzerland Seek to Boost Ukraine Investment Climate

IMF: Switzerland is facing a more challenging environment in 2023

April 4, 2023
New ADB Project to Showcase Elderly Care Options in the PRC

China: Domestic and External Conditions are Leading to a Weakened Economic Outlook

December 20, 2022
Serbia steps up partnership with FAO and EBRD for stronger agriculture

EBRD and FAO mark 25 years of cooperation with US$ 5.5 million initiative

December 20, 2022
Next Post
Moët & Chandon shares effervescently festive spirit in Paris and New York

Moët & Chandon shares effervescently festive spirit in Paris and New York

Please login to join discussion
ADVERTISEMENT
  • Trending
  • Comments
  • Latest
Find Social Security Number by Name Free

Find Social Security Number by Name Free

November 23, 2022
Most Northwest Drivers Aren’t Worried about Car Prowls

The Illinois-based insurer remains the largest US private auto writer

May 8, 2023
Humana shares on the up as earnings show Medicare growth

Humana shares on the up as earnings show Medicare growth

May 8, 2023
How to Check KRA Pin Using ID Number

How to Check KRA Pin Using ID Number

June 25, 2018
EasyJet to fly to London from Stockholm Arlanda

The London Diplomatic List, Addresses, Contacts & Working Hours

January 23, 2023
How to optimize business costs with Intranet implementation?

Protected: 5 Key Advantages of Contact Center Solutions Every Business Must Know

May 30, 2023
New direction in the construction and development market of Georgia – “Prestige” series from “Maqro Construction”

New direction in the construction and development market of Georgia – “Prestige” series from “Maqro Construction”

May 26, 2023
Long-term international migration, provisional: year ending December 2022

Long-term international migration, provisional: year ending December 2022

May 26, 2023
putin_copy_copy.jpg

Blow for Putin as UK marks one year free from Russian gas

May 25, 2023
About a third of Americans would tell a high schooler seeking career advice to enter a STEM-related field

Recruitment firms are not effective if you want to make a big career change

May 25, 2023

Popular Last 24h

  • Find Social Security Number by Name Free

    Find Social Security Number by Name Free

    0 shares
    Share 0 Tweet 0
  • Recruitment firms are not effective if you want to make a big career change

    0 shares
    Share 0 Tweet 0
  • New direction in the construction and development market of Georgia – “Prestige” series from “Maqro Construction”

    0 shares
    Share 0 Tweet 0
  • Global Finance: TBC Bank in the World’s Best Banks 2023

    0 shares
    Share 0 Tweet 0
  • Humana shares on the up as earnings show Medicare growth

    0 shares
    Share 0 Tweet 0
  • Swedish banks’ commercial property problem loans lowest in Europe – EBA

    0 shares
    Share 0 Tweet 0
  • How to Check KRA Pin Using ID Number

    0 shares
    Share 0 Tweet 0

LATEST POSTS

How to optimize business costs with Intranet implementation?

Protected: 5 Key Advantages of Contact Center Solutions Every Business Must Know

May 30, 2023
New direction in the construction and development market of Georgia – “Prestige” series from “Maqro Construction”

New direction in the construction and development market of Georgia – “Prestige” series from “Maqro Construction”

May 26, 2023
Long-term international migration, provisional: year ending December 2022

Long-term international migration, provisional: year ending December 2022

May 26, 2023
putin_copy_copy.jpg

Blow for Putin as UK marks one year free from Russian gas

May 25, 2023
About a third of Americans would tell a high schooler seeking career advice to enter a STEM-related field

Recruitment firms are not effective if you want to make a big career change

May 25, 2023
Home values in U.S. decline for second month as competition eases

Understanding The True Cost of Buying a Home Warranty

May 25, 2023
Formal Credit Channels Remain a Double-Edged Sword for Consumers

Formal Credit Channels Remain a Double-Edged Sword for Consumers

May 25, 2023
Hassan Jameel

Protected: Abdul Latif Jameel Energy’s FRV Expands Operations in Europe

May 23, 2023
First wiring map of neurons in insect brain complete

Brain signatures for chronic pain identified in a small group of individuals

May 22, 2023
New York Allows Sale Of Alcoholic Beverages During Coronavirus Shutdown As Market Shrinks To $528 Billion

Scrapping retained EU red tape on wine to unlock £180 million

May 21, 2023

LATEST INTERVIEWS

“EU membership might attract European banks and other financial institutions to enter Georgia” – NBG Vice Governor Papuna Lezhava

“EU membership might attract European banks and other financial institutions to enter Georgia” – NBG Vice Governor Papuna Lezhava

by The FINANCIAL
May 15, 2023
0

“As a member of the ProCredit Group, we provide significant advantages to SME’s, by partnering with EU organizations” – Giorgi Kardenakhlishvili, Head of Medium Business Development, ProCredit Bank Georgia

“As a member of the ProCredit Group, we provide significant advantages to SME’s, by partnering with EU organizations” – Giorgi Kardenakhlishvili, Head of Medium Business Development, ProCredit Bank Georgia

by The FINANCIAL
May 15, 2023
0

‘Russia cannot be treated as a reasonable and reliable trade partner

‘Russia cannot be treated as a reasonable and reliable trade partner

by The FINANCIAL
February 13, 2023
0

We should increase our joint efforts to assist the growing tech sector here in Georgia

We should increase our joint efforts to assist the growing tech sector here in Georgia

by The FINANCIAL
February 13, 2023
0

‘Georgia has much to offer to UK investors

‘Georgia has much to offer to UK investors

by The FINANCIAL
February 13, 2023
0

‘The best way for the Georgian economy to prosper is to join the EU

‘The best way for the Georgian economy to prosper is to join the EU

by The FINANCIAL
February 13, 2023
0

‘The Kremlin wants Georgia to fail or abandon its European path

‘The Kremlin wants Georgia to fail or abandon its European path

by The FINANCIAL
February 13, 2023
0

Russian Patriarch Kirill Says Dying In Ukraine ‘Washes Away All Sins’

Interview: Why Putin Might Prefer A Stalemate To Going Nuclear On Ukraine

by The FINANCIAL
October 22, 2022
0

Newsletter

ADVERTISEMENT

GET IN TOUCH

E-mail your company news at:

news (at) financial.ge Letters to the Editor: editor (at) finchannel.com

Local Marketing contact:

(+99532) 2252 275 | 76 EXT: 1 (+995 558) 03 03 03 (mobile) marketing (at) finchannel.com

Requests from abroad:

(+99532) 2252 275 | 76 EXT: 7 (+995599) 96 52 52 Email: zviadi (@) finchannel.com Contact video editor: E-mail: video (at) financial.ge

Postal address: 17 Mtskheta str. Tbilisi, Georgia 0179 The FINANCIAL

RESOURCE

  • Work at the FINANCIAL
  • ePaper
  • Advertise in The FINANCIAL
  • Access ePaper
  • Guest posts
  • Contributed articles
  • AmericanStockNews
  • Coupon Codes
  • GLOSSY MAG
American Culture Center
ACC Partner

GUIDEBOOK

  • Meet our team
  • Invest in Georgia
  • Become contributor
  • Archive

FOLLOW US

  • Facebook
  • Twitter
  • Google+
  • Youtube
No Result
View All Result
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • America
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • CityLife
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE

© 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.