An innovation effort launched earlier this year by a transaction banking trade group has set its sights squarely on blockchain technology.
Announced in September 2015, the Bankers Association of Finance and Trade (BAFT) Innovation Council was originally tasked to develop educational resources for a wide range of tools applicable to transaction banking, including but not limited to blockchain.
But after BAFT, a subsidiary of the American Bankers Association that is focused on cooperation among correspondent banks, hired two new people earlier this year to help manage the innovation effort, it became clear to those involved that blockchain needed to be a cornerstone of the group’s ongoing efforts.
To do that, the group moved to hire a former Coinbase employee earlier this year, and in March submitted formal comment to a US banking regulator that is currently weighing its blockchain policymaking approach.
Hired in January, BAFT senior vice president of payments and emerging technology John Collins – who served as head of government affairs for Coinbase – works directly with policymakers that interact with its member banks.
Now the vice president of international policy at BAFT, Collins said in an interview that the Innovation Council is likely to remain focused on blockchain for the foreseeable future, telling CoinDesk:
“This is something that is of such great importance and such a focal point of our members — because either it’s their entire business or a point their exploration — that it’s going to continue to be a point for us.”
One of the main objectives of the innovation effort is to help its members identify use cases for how blockchain can make trade more efficient, educating policymakers on blockchain and helping guide the conversation around the standard-setting practices Collins expects will take shape in the future.
Taking a stance
Headed by Samantha Pelosi, a former retail payments manager for the US Federal Reserve Board who is now BAFT’s senior vice president, payments and innovation, the Council met earlier this year to discuss where its members stood on the subject of blockchain technology and, perhaps more vitally, identify the knowledge gaps its members face.
Some of the “larger, more vocal members” made it “very obvious that blockchain was where they saw the biggest area of need”, according to Collins.
Since then, the group has sought opportunities to insert itself in ongoing policymaking discussions in the US, including a process currently underway at the US Office of the Comptroller of the Currency, a banking regulator within the Department of the Treasury.
In March, BAFT’s Innovation Council responded to a paper published by the agency, advocating for lenient regulations similar to those implemented by the Clinton administration and a Republican-led Congress that have been widely credited with helping spur development during the early days of the Internet.
In the letter, BAFT CEO Tom Burwell wrote:
“BAFT believes that governments should continue to allow [distributed ledger technology] to develop organically without imposing burdensome restrictions.”
In addition to BAFT’s membership of international banks, new additions include nonbanking firms that are involved in the blockchain space, including startups Ripple and Skuchain, as well as IBM.
According to BAFT, the goal of involving these nonbank companies to help them connect with policymakers in order to educate them on the nature of the technology, as well as advocate for the needs of the industry.
This work, according to Collins, is still ongoing today.
Over the next couple months, Collins says he has a series of meetings scheduled with European regulators in London and Brussels. BAFT also meets with regulators in Washington, Milan, Dublin and Singapore regularly, he said.
Blockchain is also on the agenda for the organization’s next major industry event. Next month, BAFT will co-host its annual global payments symposium in New York, with speakers from Ripple, Coinbase, R3CEV, Google, SWIFT, the Federal Reserve and IBM set to appear.
Washington DC aerial image via Shutterstock
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