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How blockchain technology could revolutionize the markets

Anthony Di Iorio, the TSX's first chief digital officer.

Jaime Hogge

Can a large financial institution be a disrupter? A year ago, TMX Group hired Anthony Di Iorio to become the Toronto Stock Exchange's first chief digital officer. The TSX wanted to lead change, not just adapt to it. Technological and financial disruption happens to be Di Iorio's business. In 2013, he co-founded Ethereum, the company behind ether, a cryptocurrency second only to bitcoin in global use. Di Iorio, 42, also advises corporate clients on blockchain, the technology that underlies cryptocurrencies and could revolutionize how businesses and consumers conduct electronic transactions. With three months to go on his contract with TMX, he moved on in September to concentrate on Jaxx, a start-up he founded that is developing a browser for navigating the blockchain world.

Give us a cocktail-party explanation of what blockchain is.

Now, just like sending an e-mail, you can send monetary value online, without having a bank or other third party facilitate the transaction. Blockchain is basically a ledger system that keeps track of ownership of digital currencies such as bitcoin. You transfer ownership by sending someone the keys to that digital asset.

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Why did TMX hire you?

In 2015, Nasdaq announced that it was seriously looking into blockchain, and that opened the floodgates for financial institutions to realize they'd better get into it, too. I had been doing some consulting work with RBC, then Deloitte and then TMX. TMX created the position for me.

What did the job involve?

Blockchain is going to have a big impact on TMX's business. I was doing a lot of education with them, and a lot of talks. Then, I worked on a number of different projects and initiatives.

Did those initiatives include things like faster fund transfers and eliminating three-day settlement?

That's all the detail I can give you. But, in general, our whole economy works on a model in which you charge a fee to connect people and provide services to them. If technology can move in and offer a cheaper way to connect individuals—peer to peer—you're not going to need third parties. Uber connects riders with drivers, and Airbnb connects homeowners and renters. Things like wire transfers, bitcoin and other cryptocurrencies allow you to settle a transaction instantly, and it won't settle if it's not correct.

What types of third parties are likely to be affected?

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It's going to have a big impact on finance, insurance and law. Smart contracts are the next level of blockchain technology. They execute code automatically. Think of a will: I can put it onto a platform, and it will execute automatically when data comes in saying that I passed away.

Why did you leave TMX?

I left because Jaxx started taking off, and my passion really lies in decentralized technologies and creating the interface for blockchain. It's sort of like the mid-1990s with Internet browsers. Back then, the technology existed but the browser was the visual tool that allowed the masses to access it. I want to be the Netscape or Google Chrome for blockchain.

Do you hope to strike it rich by doing that?

No. Ethereum was the sixth-biggest crowdfunded project ever. I've done pretty well through that.

How well?

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It's in the one, two, three, four, five…

Seven figures?

No, it's more than that.

Eight?

Yeah.

How about nine?

What is nine? $100 million?

Yeah.

Okay, so eight.

Banks and other institutions are investing heavily in blockchain. Can they become leaders in this technology?

There needs to be more of a connection between them and the developer communities. These new technologies usually emerge in meet-up groups or hack-a-thons, and big companies are often years late. A lot of developers want to be disrupters, and it's not necessarily about making money. I often suggest that banks get involved in those communities and start adding value to them.

This interview has been edited and condensed.

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