Back in 2016, it didn’t matter what the problem was — the solution was blockchain. Proof-of-concept initiatives abounded, whether or not they had a clear objective; aided and abetted by enthusiastic tech vendors, FOMO drove a large proportion, or the initiatives were vanity projects with a main goal of garnering headlines.

Fast-forward to today: A number of those early projects survived and have gone into day-to-day operation, and a raft of new initiatives joined them. One aspect they have in common: All are clear-eyed about the long-term strategic nature of projects that involve fundamental change to how financial infrastructures are run.

Today, it is evident that within banks, pragmatism has largely replaced the early exuberance. While vendors continued to push the technology as if it was a panacea, over time, the skeptics were proven right. Technology on its own cannot solve underlying issues arising from market structure and process design, let alone one that requires ecosystem participants to align. And while all emerging technologies bring with them a number of technical challenges, these are magnitudes greater in the case of blockchain. Making optimum use of the technology also introduces the need for regulatory change, which will not happen quickly.

Initiatives in emerging economies can use the “M-Pesa effect” to leapfrog their peers in mature economies. By comparison, firms in mature economies have found it harder to deploy distributed ledger technology (DLT) because it has to compete with established, proven, and mature solutions that may not be perfect but equally don’t cry out for replacement. The only exceptions are when the incumbent solution is no longer fit for purpose or where DLT solutions can deliver huge efficiency.

Given the number of operational networks covering a broad spectrum of use cases, the assertion would be inappropriate that blockchain has been of no benefit in retail and corporate banking. But there’s a larger number of initiatives in wholesale banking and capital markets. Many of them are already operational to varying degrees but are also long-term, strategic projects aimed at building new financial infrastructures.

The most sensible approach toward DLT in banking today: If you’re not already actively involved, keep a watching brief.

If you are interested in details about use cases, banks, and involved vendors, have a look at the Forrester report, Blockchain In Banking: Evolution, Not Revolution (behind the Forrester paywall).