ICE not convinced of blockchain advantages

Speaking at IDX today, ICE CEO Jeff Sprecher says it remains to be seen if blockchain can make markets better, cheaper and faster.

Intercontinental Exchange (ICE) boss Jeff Sprecher said he is not yet convinced that blockchain technology can serve the needs of the industry.

While there has been significant hype around the potential for blockchain, ICE CEO Sprecher said it has yet to meet the criteria he would look for before investing in it.

Speaking it the IDX conference in London, Sprecher said: “We look to invest in companies where we want to use their services and they need capital, and we look at services which make us better, faster and cheaper.

“I’ve not yet seen a business case for blockchain but we are paying attention to it. We have made a minority investment in a bitcoin company because we have a lot of faith in their management team, but we’ll have to see how things pan out before getting more involved in blockchain.”

The panel of exchange CEOs highlighted the major role technology innovation is playing for market infrastructure firms.

Deutsche Boerse CEO, Karsten Kengeter, said it is important for infrastructure firms to be involved in the whole chain of fintech innovation in their business, which is why his firm has made investments and acquired companies, including 360T.

However, technology may not always be the solution for every problem, according to LME CEO, Garry Jones. His firm recently launched a new open outcry floor, going against the grain of other exchanged which have largely replaced their trading floors with technology.

“Our trading floor is a method for price discovery and, while there are ways to do this with technology, a lot of people like the way the trading floor works,” explained Jones. “This is particularly true for the physical guys, who are not interested in trading technology. We’ve also brought electronic together with the trading ring, with screens showing prices and this helps reduce arbitrage between the different methods of trading.”

He also questioned whether blockchain really will make markets more efficient and cheaper but said there are many innovations around right now that have potential. Jones said the main issue for exchange groups to consider is whether they can take technology and implement in it in new ways that improve markets.