New technologies and old issues are on the agenda for this week’s podcast as Colin Lambert and Galen Stops take a look at the likely impact of blockchain on FX swaps. Stops makes the point that this would be a radical step for what is often seen as an archaic segment of the market, but also stresses that the ambitions for the project remain limited at this stage. Lambert, for his part, has no problem with the limited ambitions, pointing out that most of the challenges facing the FX swaps markets are in the inter-dealer space, where most of the trading takes place.
The pair then move on as Stops asks Lambert about ESMA’s consultation paper on adding spot FX to its Market Abuse Regime and asks ‘are you nervous by a regulator taking this level of interest?’ Whilst Lambert admits to a little trepidation he prefers to see the move as a signal to the market to be compliant with the FX Global Code…assuming the European regulator makes what he thinks is the sensible move by adopting that document as its framework for judging behaviour.
The podcast closes out with a spirited conversation over the likely erosion of the dollar’s position as a reserve currency. Stops is intrigued by the possibilities offered by the digital world, whereas Lambert sees it more as a game of numbers…and politics.