The director of a management think tank has dismissed blockchain technology as a distracting fad at a Treasury Committee hearing.
Martin Walker, director of non-profit group the Center for Evidence-Based Management, was speaking about the technology’s potential in the financial system.
He said it can offer “little to nothing” regarding potential benefits to the sector, comparing it to “magic wands” and “pixie dust”.
“All that it takes to make a credible idea into a fad is people just switch off their brains and stop thinking,” he said.
“Over 20 years in and around the banking industry — blockchain is a fad, but I have seen many fads in my career. If 10 per cent of what I’ve heard in my career had come true, we would have these amazing banks that run for £1 a week.”
Walker acknowledged that the hype had provided a catalyst for banks to update parts of their business – but cautioned that many in the finance sector were starting to see blockchain as a kind of “universal panacea” in the face of the hard work required for genuine innovation in finance.
Blockchain technology has repeatedly been hailed as the most revolutionising invention since the internet or electricity – with the potential to disrupt any industry.
In a new report published by investment bank GP Bullhound, director Sebastian N. Markowsky wrote: “Given that the technology remains immature, the market is largely driven by speculation, suffers from insufficient transparency and close to non-existent regulation, and is plagued by constant rumours of fraudulent activity.
“This has left many strategic and institutional investors wary of the technology.”
Also giving evidence to the committee were Ripple’s director of regulatory regulations Ryan Zagone and Chris Taylor, chief operating officer at blockchain company Everledger, who both spoke in favour of the technology.
The Treasury’s inquiry into digital currencies was launched earlier this year to examine how regulation could be balanced to provide protection for consumers and businesses without stifling innovation.