The concept of the blockchain burst into the public consciousness in the latter part of the last decade, as prices of bitcoin soared in a speculative market in which everyone became suddenly familiar with terms like “wallets” and “keys.” Today, the technology continues to present intriguing opportunities both as a technology to facilitate many of the core functions of the investment management industry—transfer agency, custody, and settlement—and as an asset class itself. Many of these opportunities remain unachieved, because the potential of the technology has not yet been fully built out and because existing regulations were largely adopted well before the digital age. The investment management industry may stand at the cusp of fuller adoption of innovation arising from blockchain technology that could increase both the speed and security of many basic transactions. On the other hand, the technology’s potential may fizzle if regulations are not modernized to allow for its adoption and if the cost and expense of adoption simply prove too high in view of the marginal benefit created.

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