Australian Securities & Investments Commission (ASIC) chairman Greg Medcraft has urged market regulators across the globe to start thinking about the challenges of blockchain tech­nology.

Speaking to The Australian, Medcraft said the broader commercial application of the blockchain technology was “on the horizon” with industry claims that it could “save billions of dollars if they can make it work”. He added that the technology has the potential to improve liquidity in some ­financial instruments, “which is a good thing”.

“It does potentially open up markets and make it easier for transactions to occur,” he said.

Medcraft believes that Australia had a “great opportunity to lead” the way in exploring blockchain’s potential. He noted that while some industry experts opine the broader application of blockchain technology to industry sectors such as share trading settlements could take 5 to 10 years, others estimate that it could be as soon as 2 to 3 years.

“The idea is that if you have a unique data set, or block, which can be transferred digitally, the same record can be trusted as it moves from point to point,” he said. “If there is no need to reconcile transactions you save huge amounts in transaction costs.”

This, however, is not the first time that the ASIC chief has come out in support of the blockchain technology. He has been quite vocal about it and believes that it could fundamentally change the world's existing financial system.

Speaking before the Official Monetary and Financial Institutions Forum Roundtable last month, he said that “Blockchain will have profound implications for how we regulate. We will need to find the right balance between speed of execution and streamlining of business processes. As regulators and policy makers, we need to ensure what we do is about harnessing the opportunities and the broader economic benefits – not standing in the way of innovation and development.”

ASIC’s Annual Forum 2016, scheduled to take place in Sydney later this month, will explore how new ways of doing business, structural change and regulatory reform are shaking up the financial system and the ways to adapt to changes like digital disruption and globalisation. The Australian reported that the issue of blockchain is also on the forum’s agenda.