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Rewriting the Future of Banking Sector: Blockchain Technology

Rewriting the Future of Banking Sector: Blockchain Technology

  • Blockchain-based payment services are estimated to evolve in the near future with the efficiency provided by it through its advanced technology and economic factors.
  • Blockchains can be utilized to keep important records and to execute back-end functions.
  • ECB has named its Chief for its fin-tech-focused Innovation Hub to facilitate Financial Technologies in cooperation with other central banks.

A survey published by the IBM Institute for Business Value and The Economist Intelligence Unit expects that around 65 percent of the banks will follow the blockchain technology to facilitate its day to day transactions, globally.

The technology has the capability of making the banking sector profitable and ergonomic by reducing transaction costs to an enormous extent and by reducing complexities in the same. Implementing such advancements would reduce the complex paper works and other physical documents involved in such transactions.

Blockchains can be utilized to keep important records and to execute back-end functions. The system also provides the participating members of a transaction to access a single source of information to avoid convolutions.

Faster Syndicate loans, Know Your Customer(KYC) principle, Smart Contracts are included in the variety of services provided by the Blockchain technology to improvise transaction capabilities, which leads to economic growth.


Europe’s Say

Denis Beau, the First Deputy Governor, in a recent speech, emphasized the importance of Distributed Ledger Technology (DLT) to resolve significant market issues. He also underlined the necessity to consider a Central Bank Digital Currency (CBDC) to avoid disoriented approaches in the Eurozone in its absence.

The EU residents waste a huge amount of durations waiting to execute a transaction between the banks and their international partners, a transaction, which in turn is expensive and unprotected. DLT, when combined with tokenized assets, can help resolve this issue and answer market demands. This will ensure the feasibility of Cross-border transactions.

Banque De France, the first of its kind to develop a blockchain registry system, has engaged itself to build a digital currency implementation program and has been searching for an analyst to execute the same. The bank has been considered as an important promoter of DLT.

He added that Eurozone most is open to such innovative initiatives to enhance the conditions to make the Central Bank money as a settlement asset. Eurozone’s settlement services would be sufficient to support the same.

These experiments must be implemented partnering with the European Central Bank (ECB) and other banks of the Eurozone. As a part of its experimenting initiative, ECB has named its Chief for its fin-tech-focused Innovation Hub to facilitate Financial Technologies in cooperation with other central banks.

However, it is to be noted that, the EU presidency has expressed its reluctance to issue its own stablecoins by underlining that they were only interested to regulate the same.

Conclusion

Blockchain technologies can be ascertained as the future of financial transactions. A developing economy like ours mandates the use of such technological advancements to implement economical and structured transactions based on the above-mentioned merits.

With a well-monitored regulatory system, such technologies have the capability to mold the future of payment methods in accordance with the comfort and satisfaction of the participating individuals, unlike the present conventional banks.

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About Pranav Menon

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Pranav is is a writer for Thecoinrepublic. He is interested in researching conceptual topics that can be discussed in various dimensions to understand the same in-depth. His article writing experiences have thought him to understand the various stratas of a subject.

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