There’s also a strong cohort who thinks we should focus on more innovative applications since traditional markets work fine, in spite of settlement risk, gated access and a dangerous lack of transparency. More efficient and lower cost debt markets, for example, open up opportunities for a much broader demographic than big banks, possibly facilitating the development of sophisticated markets in regions currently underserved. They also make new types of products possible, such as intraday repo, enhancing liquidity in tight markets. Could this be done on traditional databases? Some of it, sure, but would that be future-proofing market evolution? Determining the answer to that is precisely what the experimentation is for.
Of course, it wasn’t always this way. There was a brief moment, in the early 1990s, when the digital future felt open-ended. In spite of