London’s Potential Role As A Blockchain Tech Hub

For centuries, London has served as the most vital artery of the global flow of financial assets.The city’s financial industry is so critical that it accounts for 12% of Britain’s GDP, employs 1.1 million people, underlies the value of a vast swathe of commercial and residential real estate, and contributes more to the government treasury through taxes than any other industry (Andrew MacAskill, Insurance Journal, March 28 2018)

Which is why it’s important that the city recognises and embraces the upcoming paradigm shift in the world’s capital markets. According to David Treat, managing director of Accenture Capital Markets (Accenture Perspectives), blockchain technology has the potential to “fundamentally re-architect processes” in the global financial services industry. Smart contracts, distributed ledgers, and digital assets could change the way financial institutions settle contracts, onboard clients, and manage collateral. Some estimates suggest that the technology could add business value worth $176 billion by 2025 and over $3.1 trillion by 2030 (John-David Lovelock, Gartner, March 02, 2017).

Considering the magnitude of this technological shift, it seems reckless for Britain’s financial capital to ignore it. The favourable regulatory environment and thriving startup scene have already encouraged entrepreneurs and investors in the space. The Bank of England (Mark Carney speech, BoE, March 02, 2018) acknowledges the potential of this technology to make transactions cheaper and more secure, while the Financial Conduct Authority's Project Innovate is helping entrepreneurs navigate the regulatory hurdles in this nascent industry. Earlier this year, the UK government also launched the world’s first Cryptoasset Taskforce to encourage innovation in the space (HM Treasury, Gov.UK, May 21, 2018).

London, meanwhile, continues to cement its position as a prime destination for blockchain events and conferences, with at least 11 major blockchain events in 2018 (Josh Levine, Bizzabo, Feb 27, 2018). Networking events like these attract thousands of attendees from across the globe. Amongst the visitors could be talented developers and passionate entrepreneurs who may pick the city as a base for their next venture.

London’s position as the leader in financial services is about to hit a transition point. With Brexit looming, fintech gaining steam, and digital assets proliferating, it seems the city needs to innovate to stay ahead. Fortunately, combining technology with raw talent and an entrepreneurial spirit has been done here before. For now, the city has barely tapped into its true potential as a critical hub for blockchain innovation.

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