The Blockchain Investment Link

It’s easy to take all the accounting and recordkeeping that keep this world spinning for granted. No more. Change is happening.

08.03.2021 - Giles Marshall, Vice President, Portfolio Manager,

Forty-one million real-time financial transactions every day. That is the number India reached in October 2020 and it is now aiming for the billion-daily mark.[1] That figure is just a microcosm of the staggering numbers and huge variety of individual, business, and government transactions that happen 24/7. Think about all the recordkeeping, the accounting involved. How it gets done is easy to take for granted, but no more. Change is happening and it is called blockchain. Why should investors care? See what Stephen Dover and Giles Marshall say about the far-reaching potential of this innovation and your portfolio.

Q: How would you briefly describe blockchain? 

Giles Marshall: Blockchain is decentralized ledger technology (a new way of recordkeeping) most widely associated with cryptocurrencies such as Bitcoin.[2] While Bitcoin attracts all sorts of headlines—negative and positive—we believe blockchain warrants more of investors’ attention. Its tremendous capacity to enable innovation reaches far beyond being the backbone for cryptocurrencies. 

Stephen Dover: History provides useful insights on the revolutionary change blockchain may shape. During the Renaissance, two things relevant to our discussion happened. In Italy, Luca Pacioli was the first to publish a book featuring a new double-entry form of

recordkeeping.[3] It was printed on the recently invented printing press, which enabled the lower-cost “mass” sharing of his information across Europe. Pacioli’s work sparked major financial, economic, and geopolitical change. Italy’s financial institutions grew stronger and secured a leadership position for a few hundred years. The double-entry ledger enabled businesses to make better-informed decisions. Loans between companies and between countries happened. The world of finance changed.

In the 1990s, I don’t think anyone could fully envision how the internet would transform the way we share data, media, and ideas—how it would break down barriers and democratize information sharing. Nor could we imagine the range of business models that have emerged on this platform.

Blockchain presents an opportunity for transformation akin to the Renaissance, bolstered by the platform for ongoing innovation the internet provides.  

Blockchain presents an opportunity for transformation akin to the Renaissance… - Stephen H. Dover

Q: What is it about blockchain that makes it so potentially disruptive?

Giles Marshall:  A good place to start is by understanding a fundamental difference in the way blockchain functions. People are used to having a trusted intermediary involved in various information and financial transactions. Your bank, for instance, stands as a central administrator between you and purchases made from a merchant.

Blockchain, however, keeps a digital ledger of transactions distributed across a network of computer systems. Each block in the chain contains numerous transactions, and every time a new transaction occurs, a record of that transaction is added to each participant’s ledger. The main benefit of recordkeeping this way is that it is very difficult for someone to change or hack the information. Blockchain facilitates peer-to-peer transactions where individuals place their trust in the network versus each other, or a large institution. The traditional need for a trusted intermediary to facilitate a transaction disappears.

Blockchain is already disrupting various sectors such as financial services and it is unsurprising that banks have been taking blockchain seriously. The same approach to exchanging and recording information applies to other situations such as health records, insurance, payments, energy trading, and supply chain management. According to Deloitte’s 2020 Global Blockchain Survey, more than half the respondents identified blockchain adoption as a top five strategic priority within the next 24 months.[4]

Stephen Dover: Though a relatively new and evolving technology, the global blockchain market is expected to grow from US$3 billion in 2020 to nearly US$40 billion by 2025.[5] If implemented on a mass scale, companies testing new blockchain applications today could have significant competitive advantages in five or 10 years.[6]

Conversely, blockchain could be an unfortunate “Kodak moment” for some businesses. Though a cliché, Kodak’s story offers a relevant, less understood lesson. The company was a technology leader when digital cameras became popular. Its decline was not a failure of invention, but a failure of commercial innovation. In today’s world, companies face a similar risk and will need to study their customers’ needs and develop future business models that will answer those needs most effectively. We think blockchain technology will make many of tomorrow’s business models possible.   

Q: Do you think blockchain’s adoption rate will grow in a straight upward line?  

Giles Marshall: The technology has moved beyond the experimental stage and is widely seen as an agent of change with broad organizational applicability. Blockchain’s current limitations are scalability and speed, but this will inevitably accelerate. Factors such as costs of replacing or adapting legacy systems, potential security threats, and the need for regulatory clarity could also influence the pace of change. Such things might slow, but would not likely halt blockchain’s progress. 

Q: Looking ahead, what are some of the major themes you believe will evolve?

Stephen Dover: While there is lots of talk about non-sovereign cryptocurrencies like Bitcoin, which exist because of blockchain technology, it is important to note nations worldwide are moving to introduce central bank digital currencies (CBDCs) to represent their country’s fiat (i.e., paper, coins) currency. China is leading the way, with countries like Australia, New Zealand, and South Korea also in the forefront. The United States is picking up its pace. 

Similar to Italy and the Renaissance, adopting decentralized ledger technology and launching a CBDC has geopolitical significance, in that a country’s future power is going to be somewhat dependent on its ability to manage technology and financial systems. So, the race to be a leader or set a standard in adopting blockchain is really a race to see who’s going to have more power. The top contenders are the United States and China. The world will be watching closely as the race unfolds.

Looking through an investment lens, earlier we talked about the internet democratizing the sharing of information. Given its innovations of tokenization and fractional ownership of assets, we expect blockchain to democratize the sharing of value. This could greatly broaden people’s access to investment opportunities, including illiquid and non-public investments.

As risk managers, assessing companies’ awareness of blockchain and its implications for their businesses and their customers will be part of our ongoing research and analysis. How are management teams strategically approaching this innovation? Where will they take it? Where will blockchain merge with existing and new business models? What new opportunities will it create? For instance, on a global scale, emerging markets are increasingly technology-driven and more growth-oriented than their developed peers. We would not be surprised to see innovations grow out of countries like India. Our ongoing answers will likely affect the companies you own in your portfolio in the months, years ahead.



  1. “At 41 million real-time transactions a day, India leads the world: Report” The Times of India, October 7, 2020,
  2. Blockchain is the most popular distributed ledger technology today and has also become a generic term.
  3. David Kestenbaum, “The Accountant Who Changed the World,” NPR, October 4, 2012,
  4. Linda Pawczuk, Jonathan Holdowsky, Rob Massey, and Brian Hansen, “Deloitte’s 2020 Global Blockchain Survey: From promise to reality,”
  5. “The global blockchain market size is expected to grow from USD 3.0 billion in 2020 to USD 39.7 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 67.3%,” Reportlinker, May 13, 2020,
  6. Viraj B. Patel, “Blockchain: The Next Wave of Technology Disruption,” Fiduciary Trust International, August 16, 2018,



Trust Myths Up Close

08.03.2021 Thomas E. Junkin, Senior Vice President, Personal Trust Services and Operations

lost in the popular news mix. Decide how myths—such as trusts are only for very wealthy people or only designed to dupe tax departments—stand up to the test.

Trust Myths Up CloseNEXT POST


Markets Respond To Reopening Progress

08.03.2021 Vincent Tonietto - Vice President, Portfolio Manager

Vaccines are one of the important factors shaping the reopening of economies worldwide. Find out what else is driving change and how the mix is affecting various markets.

Markets Respond To Reopening ProgressPREVIOUS POST