How blockchain is changing everything

Think blockchain is a niche technology that’s all about Bitcoin and other cryptocurrencies? Think again. According to Sandra Ro, blockchain pioneer, entrepreneur and CEO of the industry body the Global Blockchain Business Council, blockchain will be all-pervasive.

“We are living in an increasingly data-driven world,” she says. “Blockchain will be the infrastructure on which next generation tech applications are built.”

The time will come, she says, when people will use blockchain without noticing it or even knowing it, much as mobile phone users rarely give a thought to the computers that switch their calls from one “cell” to another. How did Ro find herself in the world of “distributed ledger technology”? After leaving London Business School with an MBA in 2004, she first went to work on the trading floor of Deutsche Bank in London on the foreign exchange side, then moved to Morgan Stanley, where she worked on M&A derivatives.

“Then came the financial crisis. I first heard of Bitcoin in 2012, and although word had reached London trading floors in 2010/2011, the attitude was: ‘Hey! This is new technology,’ as if it were quite interesting but no more than that. I came quickly to realise it was really viable and potentially paradigm-shifting.”

Ro moved to the London base of the Chicago Mercantile Exchange as head of FX product development and was able to take crypto-currencies under the general R&D umbrella. “We grew organically, a small internal group working deep into this space. We built up a lot of knowledge. This gave us a two-year heads-up, including having produced papers on the subject and filed patents.”

In 2016, she and her colleagues launched the CME CF Bitcoin real-time index and daily Bitcoin Reference Rate. It was one of the first such indices and had been years in the making. The CME was one of the first big institutions to give this new asset class its stamp of approval. The index products were well-received.

“CME’s success in this area was about timing as much as products,” she recalls. “We had talked to the regulators, it was pioneering work. We had our own budget and our own people. We were not a cost centre but a business unit. We had buy-in from most of the top and across the board.”

There are, she believes, important lessons here for any businesses wishing either to innovate using blockchain or simply to incorporate the technology into their operations. In such cases, she says: “The education piece is important. It is very difficult for large institutions to create an environment of creativity and innovation. They need to let the team adopt a running mentality, not a walking mentality.”

Furthermore, she says, any business leaders bewildered by the different versions of blockchain that are available need first to decide precisely what it is they are trying to achieve, what problem they want to solve. It ought then to be easier to select the ‘correct’ blockchain.

At the end of 2017, the CME moved into Bitcoin futures based on the previously launched Bitcoin Reference Rate. She left July 2017, but had designed the Bitcoin futures product as it trades today.

By this point, a “blockchain summit” held in 2016 on Sir Richard Branson’s Necker Island in the Caribbean had conceived what became the Global Blockchain Business Council (GBBC), a body to put the case for an industry that is often misunderstood.