Governments the world over are notoriously fickle when it comes to legal and regulatory compliance within the blockchain and crypto space. We had a chat with the MD of IBM Malaysia, Catherine Lian on these concerns and other issues in this fourth part of our interview series.
In Malaysia, the Securities Commission recently revealed plans that affect the burgeoning IEO scene and the overall use of blockchain for the digitization of local capital markets. We asked Lian about her take on things. “We believe that the Securities Commission’s plan to use blockchain for the digitization of the local capital market is a step in the right direction…the consultative approach and handholding by SC would help shape the right environment and clear regulatory framework that inspires confidence and security among players,” she said. Lian believes governance will take centre-stage this year and in this area, with governments and regulatory bodies having a role to play.
She went on to say that with 88% of institutions, according to IBM’s research, the assurance of standards to communicate data to and from blockchain networks is an important factor to join an industry-wide blockchain network, and that trust and transparency is essential. But, in a world where data is being collected and transferred faster than ever, it’s understood that there will be inconsistencies in a company’s data, either from human error or malicious players. Lian believes that with a need for heightened data protection mechanisms, this year, blockchain solutions will use validation tools along with crypto-anchors, IoT beacons and oracles, mechanisms that link digital assets to the physical world by injecting outside data into networks.
Tokens, digital currencies and central bank-backed digital currencies (CBDCs) have been a growing topic of interest for capital markets. Tokenizing assets and securities, converting them to digital tokens, and then trading, exchanging and settling custody of such digital assets is transforming the efficiency, security and productivity of capital markets. In fact, 58% of organizations that IBM surveyed agree that they can derive new sources of revenue by tokenizing assets exchanged on a blockchain-enabled marketplace. In addition, new organizations and regulations have even been put in place to facilitate the creation, handling, trading and settlement of such tokens and digital currencies.
With countries in Asia, the Middle East and the Caribbean beginning to experiment with CBDCs in real time, there is no doubt that they will continue to gain momentum in the new year and redefine payments in several ways. For one, CBDCs will see continued expansion in wholesale CDBCs, with some initial forays in retail CBDCs. Moreover, we find there will be increased interest in tokenization and digitization of other types of assets and securities such as central bond debentures for treasury bonds. In fact on 7 January 2020, IBM was awarded a U.S patent for a “self-aware token” that would make it easier for individuals, businesses and government to track and trace transactions using cryptocurrency. When the token rejoins a platform ecosystem, it automatically uploads data from any “off-line transactions.” In the next one to three years, IBM research has found that 68% of CTOs and CIOs expect to see a scalable governance model for interactions across multiple blockchain networks to be an important feature of their organization’s blockchain environment.
Be sure to check out the fifth and final part of the interview series with Catherine Lian, MD of IBM Malaysia, next week!
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Anil started his career in journalism all the way back in 2003. After traversing the sphere of editorial, corporate communications and advertising, he has now come full circle and is back in the world of journalism. He believes in the power of the written word, and its ability to enthrall, delight and inform the reader.
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