Perks of a Follower? HKEX Seeks Second-Mover Advantage on Blockchain

Oct 24, 2017 at 10:00 a.m. UTCUpdated Oct 26, 2017 at 9:06 p.m. UTC. Thanks to blockchain, the world's stock exchanges are now being reimagined from the ground up.

During a panel at Swift's Sibos conference last week, Kennedy indicated that she's content with moving slowly toward blockchain adoption, learning first from the successes and mistakes of others.

As part of the HKEX's exploration of the technology, the firm plans to launch a private market for smaller companies interested in building blockchain applications and is engaging with the Australian Securities Exchange and others to explore other use cases.

For those answers, Kennedy is studying the moves of other securities exchange incumbents - which she said have significantly more advanced blockchain projects - as guidance.

Since beginning its exploration of blockchain over a year ago, the NSD has published the results of an early test for a proxy voting solution using the NXT blockchain and - as revealed on stage - has sold a $10 million bond by Russian telecom MegaFon using the open-source Hyperledger Fabric platform.

Another leader represented at the event was Banca IMI, a subsidiary of Italian banking group Intesa Sanpaolo, which has been experimenting with using blockchains for the issuance of securities.

Designed to automate the collateral management process, the project is part of a larger effort by Banca IMI to "Layer" public blockchain functionality on top of a private blockchain.

None of those projects are yet live, which hints at the lingering questions that remain about how a blockchain solution would work for a securities exchange.

HSBC's work in the area appears to be largely focused on supply chain trade finance and the potential issuance of fiat currencies on a blockchain.

According to van Verre, that's because the risk from corporate actions related to a company's shareholders was higher at HSBC, and there isn't a clear view of who gets blamed if something malfunctions within these blockchain ecosystems.