Blockchain Impact on Securities

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Understanding Blockchain Technology’s Impact on the Securities Markets

A team of legal and business researchers from Columbia has been awarded a grant to study how blockchain technology is affecting the security markets.

The grant, from the Columbia-IBM Center for Blockchain and Data Transparency, will allow the researchers to design and conduct a survey of securities-market stakeholders such as regulators, academics, policymakers, securities employees and journalists. The survey will allow for a deeper understanding of how blockchain technologies and digital ledgers are likely to affect the markets and how their potential should shape future regulation.  Once the survey is done, the researchers will outline their findings in a white paper and present their results in a conference at Columbia. The researchers are affiliated with The Program in the Law and Economics of Capital Markets, a joint program of Columbia Law School and Columbia Business School.

Merritt B. Fox, Michael E. Patterson Professor of Law at Columbia Law School who is leading the legal aspects of the project, said there is a vast amount of potential in blockchain but also many pitfalls. Each of the various stakeholders to be interviewed for the survey has a unique perspective on these issues and it’s important to learn the learn these perspectives in order to design regulation that best advances the interests of society.

“The area is bursting with innovation and experimentation and we look forward to learning more about these,” said Fox. “Facilitating clearing and settlement, reducing the role of intermediaries, increasing global access to data, and furthering empirically-driven policymaking are just a few examples of areas we’ll look at.”

Juliette Fisbein, Director of Strategy and Operations for the Columbia University-IBM Center for Blockchain and Data Transparency, said the center awards grants to cutting-edge research in the area of blockchain and data transparency technologies, with this project being a good example of such research. Formed in the summer of 2018, the center is devoted to research, education, and innovation in blockchain technology and data transparency. The Data Science Instituteand Columbia Engineering are partnering with the center, which also works in tandem with Columbia’s Business School, the Law School, the School of International and Public Affairs as well as Columbia Technology Ventures.

“The center is pleased to fund multidisciplinary research allowing to combine the complementary perspectives of lawyers and economists,” Fisbein said, “and will continue to seek multidimensional expertise to study blockchain technology and its potential throughout 2020 and beyond. Additional calls for research grant proposals will be announced this fall.”

In this Q&A, Fox discusses how the researchers will seek to gain a broader understanding of the role that blockchain technology may play in the securities markets. ....