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Banks Help Blockchain Move from Bitcoin to IoT

As companies continue to look for practical uses for blockchain’s distributed ledger technology, we’re seeing interesting collaborations between major banks, global technology players, and nimble startup fintech companies. To be sure, banks are still focused on blockchain as it applies to financial services. BNY Mellon recently hosted a blockchain event at which presenters discussed whether blockchain should be viewed by banks as a disrupter or an opportunity. (Naturally the bank is looking for opportunity.) Of particular interest to the lawyers is the discussion of legal risks raised by blockchain, which include problems already in existence, such as data privacy concerns across geographic jurisdictions, and new problems created by blockchain, such as identifying where an asset is when no one bank or entity is the custodian of the record.

But the banks aren’t only experimenting with, dare we say, traditional financial uses for blockchain; they’re right in the mix trying to figure out how to exploit blockchain in industries far beyond the bitcoin world. BNY Mellon has also, for example, joined Cisco, Foxconn, security company Gemalto and several blockchain startups in a collaboration to develop a shared blockchain protocol for the Internet of Things. Blockchain could potentially improve security of IoT applications and create a tamperproof manufacturing, maintenance and supply chain history, areas not typically viewed as concerns of large financial institutions. Banks are experimenting with supply chain technology. Now that’s looking for opportunity in the world of disruption.

Copyright 2020 K & L GatesNational Law Review, Volume VII, Number 33

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About this Author

Susan Altman, KL Gates Law Firm, Commercial Transactions and Outsourcing Attorney
Partner

Susan Altman navigates businesses through the complexities of today’s technology-enabled commercial transactions in order to help lower costs and improve revenues. Ms. Altman helps clients properly structure contracts in ways that foster long-term, positive commercial relationships, whether through subscription agreements, licensing, strategic alliances, or outsourcing transactions. For example, she recently structured all of the commercial contracts to launch a digital exchange through which institutional investors, banks, broker-dealers, and registered advisors may...

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