The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development

Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee
the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

HOW BLOCKCHAIN IS
CHANGING THE WORLD
AND WHY IT IS RELEVANT TO
CAPITAL MARKET AND FINANCIAL REFORM

Caroline Malcolm
Head, OECD Blockchain Policy Centre
caroline.malcolm@oecd.org || www.oecd.org/finance/blockchain
 Blockchain is…..

• Blockchain is a type of distributed ledger technology (DLT) which :

• Verifies and records transactions, gathering them into groups
(blocks);
• Links blocks in chronological order, to establish a chain of
blocks which is (almost) immutable;
• This ledger (the chain of blocks) is recorded on multiple
computers (nodes) in a peer-to-peer (i.e. distributed) network
 Digital Financial Assets

Tokenisation – what is it?

Plus, 3 broad categories of digital financial assets:
 Payment tokens
 Security (or “Asset and Financial”) tokens
 Utility (or “Consumer”) tokens
**n.b. fluidity & hybridity
Y
Why is blockchain relevant?

Blockchain is transforming financial services

which have previously relied on trusted intermediaries, whether
traditional (e.g. banks) or digital (e.g. online peer-to-peer
platforms).
 State of the market

Current prominent use cases in financial services sector:

 Payments clearing and settlements, e.g. JPM coin
 Issuance and trading of tokenised assets and digital financial assets
 KYC requirements, e.g. Singapore regulator pilot with bank consortium
 Trade Finance, e.g. we.trade, Marco Polo
 Insurance, e.g. Etherisc for flight insurance

Many of these use cases rely on smart (i.e. encoded, self-executing) contracts
 ITOs v IPOs
Global ITO proceeds as a % of IPO proceeds

Source: OECD(2018), OECD Equity Market Review of Asia 2018;

www.oecd.org/corporate/OECD-Asia-Equity-Market-Review-2018.pdf
Risks
 Regulating in a
blockchain-ed world…
 Changes to financial services, but also to business models….

Relevant private sector actors include: Internet as a governance model?

• Protocol developers Market

• Smart contract developers

• User interface providers
Norm Law
• Off-chain information providers
• Users, in particular:
o Capital providers Architecture

o Liquidity providers Lawrence Lessig – Code Ver 2.0, 2006

The role of cross-border cooperation

 OECD Blockchain Policy Centre

The global reference point on blockchain

and other distributed ledger technologies (DLTs)
for policymakers
• Four pillars
• Policy research, guidance and standards
• Capacity building
• Convening
• Connecting the dots
OECD Blockchain Policy Forum 2019, SAVE THE DATE 12-13 September
Caroline Malcolm, Head, Blockchain Policy Centre
Caroline.malcolm@oecd.org
www.oecd.org/finance/blockchain
 Resources

• OECD Blockchain Primer

• ICOs for SME financing
• The potential for blockchain technology in
public equity markets in Asia
• Blockchain and Competition policy
• Blockchains Unchained: Blockchain technology and its
use in the public sector
• Blockchain and beyond: encoding 21st century transport