Building with blockchain is tough – for every problem the tech promises to solve, it seems another pops up.

But if you take the advice of former JPMorgan Chase executive and Digital Asset CEO Blythe Masters, it's worth all the fuss. Speaking on a panel today at Swift's annual Sibos conference in Toronto, Masters emerged from a relatively silent period with a defense of the technology.

Masters told the audience:

But integrating blockchain for its myriad of benefits – including faster settlement times and greater data transparency – is an expensive endeavor. DAH, in particular, has raised $107 million in funding so far to expand the startup's blockchain solution, which it is working to integrate into the Australian Securities Exchange (ASX), the country's largest stock exchange.

As such, Masters' comments set the stage for what would be a nuanced discussion about how real blockchain applications deal with the two key pain points: security and compliance.

"It's not as simple as just introducing new tech," said Ikuma Ueno, head of blockchain and DLT at Japan's Mizuho Financial Group.

As put forward by the panel, the questions that typically arise when building blockchain solutions tend to focus on the management of cryptographic keys that give users access to the ledger.

But Masters, instead of viewing this as an obstacle for distributed ledger implementations, positioned it as part of a larger threat against the way cryptographic keys are handled in today's centralized infrastructures.

"The propagation of higher standards of key management for the enterprise is something everyone knows they have to do anyway, and it has absolutely nothing to do with blockchain," said Masters, adding:

Echoing Masters' statements, Tom Jessop, the president of blockchain startup Chain, argued blockchain technology is proving helpful in eliminating the "honeypots" of data that lure attackers to centralized systems. And that in itself makes the cost of blockchain worth the future savings.

Large financial institutions seem to agree. Jessop's startup Chain has built live blockchain solutions for both Citi and Nasdaq, and has secured $43.7 million in funding.

He continued, saying blockchain's append-only data structure minimizes the chances of fraud as well.

But, Jessop went on to argue that security isn't as big of a cost obstacle for blockchain projects as compliance costs are. "Security is very important," he said, "but it's not of first-order importance."

The global bank representatives on the panel – Mizuho Financial Group's Ueno and Alicia Pertusa, the head of corporate and investment banking at BBVA, which is working on its own blockchain foreign exchange pilot – agreed saying that working with regulators and standards bodies should be a focus for those implementing blockchain.

But even that hurdle can, and should be, overcome. For instance, Ueno has already had success with this, working with Japan's financial regulators to change the country's requirement that bills of lading must be paper.

While regulators might not typically be thought of as a security feature, the sentiment was struck unanimously among the panelists. Because regulators craft rules to protect consumers and the financial system against fraud and malfeasance, working within their guidelines can protect companies from vulnerabilities they might have otherwise missed.

In summary, the chief information officer of foreign exchange technology provider CLS, Thomas Zschach, affirmed the importance of working with regulators to ensure that the potential risks of working with blockchain do not outweigh the benefits.

Zschach concluded:

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Chain. 

Panel image via Michael Del Castillo