Bitcoin trading technology could be used by the financial industry as early as next year

    TABB Research, a research institute, pointed out that the blockchain technology that created Bitcoin could be applied to the capital market as early as next year, helping to improve transaction security and create new revenue for banks. A consortium of more than 20 banks, led by financial technology company R3, is developing a blockchain technology architecture.

    According to a report by U.S. financial media CNBC on Wednesday, research firm TABB Research pointed out in a report that the adoption of blockchain technology in the financial industry is no longer a question of whether it is feasible, but rather a question of when to use it.

    Blockchain technology was created for Bitcoin. It functions like a huge ledger that records every transaction and stores the information in a global network system, making it impossible for transactions to be tampered with at will.

     The report's authors predict that blockchain technology could be used to track syndicated loans by the second quarter of 2016, but that it could take longer to be used in other areas. For example, it could take up to five years of research and development to use the technology in derivatives, and another 10 years to process stock transactions.

     Blockchain technology has the potential to create a more efficient and transparent system for tracking and recording financial transactions, or to improve banks' existing systems.

     “Blockchain technology has the potential to be applied to many aspects of capital markets, bringing new opportunities for improving efficiency and generating revenue,” said Shagun Bali, an analyst at TABB and one of the report’s authors.

However, Barry also pointed out the challenges that hinder the adoption of blockchain technology, including the cost of integrating the technology into existing systems.

     "Further due diligence on counterparties and other transaction-related risks remains important, and once blockchain technology is widely adopted, a robust regulatory framework will still be needed to maintain balance," Barry said.

    TABB's report reinforces the findings of the Bank of England, which last year published a report on Bitcoin and praised blockchain as a "real technological innovation" that can maintain transaction operations without the need for a third-party intermediary while maintaining the security of digital records.