Many dialogues at this year’s Australian Blockchain Week, which held its opening day at ASX, seemed to emphasise just how far we have come since last year’s conference. As my colleague Dan Chesterman, ASX’s Group Executive of Technology and Data, said: “Time passes in this particular area of the economy a little like dog years – it certainly seems like much more has changed in the last year than could normally fit into twelve months.”

It’s not just the freedom to gather together in one place without masks, or the lingering effects of the recent ‘crypto winter’ that made everything seem different. It’s more that the atmosphere was more businesslike and less frothy. “We are learning from the recent fallout – we have moved away from irrational exuberance,” said Sophie Gilder, Managing Director, Blockchain & Digital Assets at Commonwealth Bank. 

Sophie argued with conviction that the technologies we like to call ‘decentralised’ will transform commerce and finance, and is optimistic that this change will be positive. “We are not discarding the promise: the surviving solutions will be the best ones.”

Better together

But there was consensus among our speakers that those seeking to build better infrastructure for finance and businesses with blockchain will need to work together.

This idea isn’t new. A year ago it was implicit in everything we discussed, but events in the meantime have stressed how important cooperation is now. “2022 was key in terms of highlighting the need for consumer protections, so people are coming together a lot more to build better community,” Mike Meisels, Senior Enterprise Account Executive at Chainalysis said. 

The arguments for this spirit of common endeavour went something like this.

Decentralised technology was born of the libertarian drive to place greater agency in the hands of individuals and to shake up the financial system by removing the need for intermediaries. 

Its early implementations involving the digitalisation of ‘virtual’ assets so they could be exchanged on a peer-to-peer basis have proven vulnerable to bad actors and unexpected failures. Yet the technology itself retains its potential to drive increased efficiency, security and innovation. Blockchain’s successful future lies in the world of regulated enterprises and the tokenisation of real-world assets from securities to property. But to realise its potential, we should preserve the cooperative approach that enabled the first wave of use cases. 

In fact, there has always been a tension between the extreme focus on individuality that characterised the crypto movement and the need for shared standards and infrastructure inherent in business and finance. The key is to enable enterprises to capture the benefits of DLT by ensuring it delivers the safety and transparency businesses, consumers and regulators require. 

Banks are bonding

This is certainly the approach our big four banks are taking. “Cooperation is the way; NAB’s stablecoin is designed to provide connections,” said Kate Cooper, Executive, Digital Assets at National Australia Bank. “It enables us to work as a traditional financial institution in the digital space.” 

Shane Verner, ANZ Sales Director at Fireblocks said the principle of collaboration typifies the banks’ approach to developing the technology: “We have a real community, not like big business. The banks’ teams are exuberant participants who are proactive,” he said. 

Service providers already know that working together is a force multiplier. As Ben Morris, Director, Web3 & Gaming APAC at Circle put it: “For real payment innovation to have an impact, we need well-regulated institutions to come together and offer these services. We can’t exist in silos – everything is connected.” 

Certainly when seeking better consumer protections against scammers, everyone has a role to play. “Defeating bad actors needs collaboration – breaking down the silos and barriers between everyone in the community,” said Aaron Boyd, Vice President, Payment Security & Risk, Cyber & Intelligence at Mastercard. “There is no competitive edge in keeping fraud and scams to yourself.” 

The "I" in team

Perhaps the best way of summarising the power of market participants pulling in the same direction is simply that it makes good business sense. “Seamless customer journeys are really important – they need to be easy and safe,” Aaron added. “It will take a lot of cooperation between banks, fintechs and regulators to make this happen.” 

I think we understand the balance between teamwork and individuality in Australia. It’s at the heart of our many sporting teams, among other things. 

Yes, our success in the FIFA Women’s World Cup will depend on brilliant individual performances like those we have seen from Sam Kerr, Mary Fowler and Steph Catley. But winning also depends on all the team coming together (especially during adversity) to be more than the sum of their parts as the mighty Matilda’s did in their first match against Ireland, overcoming the injury to Sam Kerr. 

That looks like the best way ahead for financial services and businesses on blockchains, too.