We all know the rapidly changing state of cryptocurrency, but are the banks of the world ready to face the reality they bring.
To many, cryptocurrency is the financial giant that has the power to remove the need for banks in the modern world. However, blockchain (cryptocurrencies’ driving system) is a lot more malleable than you might think. So much so, that large banks are trying to incorporate it into their systems. All over the world banks are employing research teams to investigate the phenomenal success of cryptocurrencies.
Now one might think that they are working hard on coming up with a way to topple crypto and bring the power back to the big banks, but in actual fact they are figuring out how they can incorporate blockchain into their own systems.
For those who don’t quite understand
Blockchain is simply a decentralised ledger system. When an update (eg. a purchase or a sale) is made all the users in the system verify it, making it near impossible to alter illegally. Now of course, cryptocurrencies use this system to manage the buying and selling of each ‘coin’ of whichever currency, but it could ultimately be utilized in any system.
Here are some of the implementations
One of the largest uses of the blockchain we are seeing are groups of banks creating cross bank consortiums that can check and update transactions instantaneously. Having a digital ledger system that automatically prevents fraudulent transactions and any human errors are very beneficial for any business, especially banks.
Per the Financial Times, Spanish bank Cecabank and Grant Thornton have created the world’s first blockchain banking consortium. This currently comprises 33% of the banking sector in that region. They are currently working on any and all applications of the blockchain. Their primary goal is to increase efficiency and prevent any opportunities for money laundering.
The Financial Times also reports a group of banks from around the world (Erste Bank, Commerzbank, Caxiabank and the Bank of Montreal) joining IBM to create a global project under the title of Batavia. They hope to implement blockchain and start using it in very real-world transactions.
The more aptly named project Hyperledger project is also garnering a lot of traction with American Express and a large group of technology companies (Including Intel and Fujitsu) joining forces to create, well, a Hyper ledger of both client and inter-business transactions.
Blockchain is proving day by day that it isn’t just a one trick pony, but a tool of the future, that has the potential to revolutionize banks and other businesses around the world.
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