I came across this very interesting take on how the amortised cost of a clunky but functioning financial system may constitute an impediment for blockchain innovation coming from within our financial system.
It reads a bit like a warning to incumbent businesses in general, many of which are also running on fully-amortised legacy systems, to accept more risk in trialling new technologies. Some trials are likely to fail. But these companies have the most to lose should a technological tipping-point be found elsewhere.
Western countries have spent countless time, money and energy to build a financial infrastructure that is heavy, slow and partly inefficient, but quite secure and that provide a lot of jobs while capturing a lot of the value created in the world of finance on a global basis. These infrastructures are, for the most part, well amortized and the basis for the continued profitability of the large issuers and card networks, even in an ultra-low rates environment. Moreover, those industries have very large pools of employees, often well paid, a large portion of which are still located in Europe and North America. It is therefore not difficult to understand why the West is slow in adopting new technologies. Vested interests are strong