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The transformational potential of the blockchain technology

Release date: 03 Sep 2018 | Eurex Exchange, Eurex Clearing

The transformational potential of the blockchain technology

A conversation with Jens Hachmeister, Head of DLT, Crypto Assets and New Market Structures at Deutsche Börse

Blockchain and the distributed ledger technology (DLT) are certainly among the most innovative transformational technologies for financial markets. Deutsche Börse Group has already invested in various Blockchain initiatives and is tapping into the potentials of this new technology. The newly established area “DLT, Crypto Assets and New Market Structures” will focus on the further development of a Group-wide approach. We spoke with Jens Hachmeister, who is heading the initiative, about the importance of blockchain, his new team and his own motivation to drive this growth area to the next level for the Group.

 How does DLT/Blockchain fit into our “Roadmap 2020” strategy and why is the technology so important for the financial markets infrastructure?

Jens Hachmeister: Deutsche Börse Group is already one of the leading European capital markets infrastructure providers, and we are aiming at expanding also on an international level. In order to deliver on our ambitions, the growth programme “Roadmap 2020” follows a three-pillar strategy. One of these pillars is investments in four emerging key technologies: cloud, big data & analytics, robotics & artificial intelligence and DLT/blockchain.

From Deutsche Börse’s point of view, the DLT/blockchain technology is a key opportunity for the creation of new market structures, adding new products onto our present structures and enhancing our existing offerings. Its potential cuts across our entire value chain – pre-IPO/listing, trading and clearing, settlement and custody, and even the data and analytics business. Of course, the expectations are high and not all of them will be fulfilled – blockchain will not be the answer to all our questions. Yet the digital economy in general is heading for decentralisation. In future, there will be more peer-to-peer governed marketplaces and less intermediaries. In that regard, blockchain has the potential to disrupt the capital markets infrastructure. It is a decentralised ledger of all transactions across a peer-to-peer network, where participants can confirm transactions without the need for a central certifying authority. Many other industries have also acknowledged the significance of this technology.

Deutsche Börse Group has already been active with a couple of initiatives in the area of Blockchain. Now, Deutsche Börse’s Executive Board has decided to set up a dedicated DLT, Crypto Assets and New Market Structures team to further advance the topic.

What can we expect from the new approach?

Jens Hachmeister: We see that several market offerings based on DLT/blockchain technology cut across the Group’s value chain already, challenging our traditional market infrastructure – for example equity funding innovations through initial coin offerings (ICOs), decentralised secondary market platforms, or blockchain-based custody solutions just to name a few. Deutsche Börse has been active with the technology in a first phase of ideation and exploration. We invested in various initiatives to create a sound understanding of the trends, the technology and its potential within the traditional segments of our value chain.

However, these explorative steps have not been coordinated on a Group-wide level. In order to use the full potential of the technology for our businesses, to generate efficiencies and create revenues, a centrally steered approach is necessary to make a greater impact.

All initiatives in the field of DLT/blockchain will now be operated by one team, in a joint Group-wide approach. We will of course work in close cooperation with the business segments and IT and in close alignment with colleagues from Group Legal and Group Regulatory Strategy.

Can you tell us something about the team set-up?

Jens Hachmeister: The new team consists of 24 members, including myself heading the team and Eric Leupold as my deputy. All team members joined for their proven DLT/blockchain  expertise or involvement in already ongoing initiatives. Every one of them brings skills to the table which we need to position Deutsche Börse Group as a relevant player in the DLT/blockchain arena.

The team is organised in a project structure along our different initiatives and headed by a functional lead driving it forward. Furthermore, there will be two programme managers, building the interface and coordinating between the initiatives. We have a lot of work ahead of us and the next months will be crucial. However, I am convinced that we have excellent minds on board with whom we can master the challenges to come.

You have contributed your expertise in many different areas of Deutsche Börse Group. Now you are heading the blockchain team. What are the challenges and what drives you?

Jens Hachmeister: Looking at the pace of technological progress and the transformational potential that lies in Blockchain, we probably stand at the beginning of a new era that could be disruptive for the whole industry. The challenge is that we don’t exactly know where this will lead to. The possibilities this new technology offers, are fascinating and it is great to have the opportunity to hopefully make significant contributions and to drive this topic forward for the Group. My team and I are very motivated to drive this journey for Deutsche Börse, as I am personally convinced of the great potential for our company.

 

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