Blockchain Moves Forward In The Financial Industry
Cryptocurrencies like bitcoin have had a lot of negative attention over the past year, as several hacking attacks and scams have painted the coins as an unsafe way to make transactions.
However, blockchain, the ledger-like system that bitcoin runs on, has received a great deal of praise across several industries that say the technology has the potential to completely reform the way they do business. This is especially true in the financial space, where banks say that although they are still wary of bitcoin transactions, incorporating blockchain into their operations could actually improve their businesses.
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Cross-Border Payments
One way blockchain could improve the financial industry is by improving the way banks make cross-border transactions.
The current system is cumbersome and takes a great deal of time and effort for both the sending and receiving bank. This process has made it difficult for banks to interact with one another from country to country, but incorporating blockchain could change all of that. The ledger system would streamline cross-border payments and take out much of the administrative work associated with processing international transactions.
Closer To Integration
From January 11 to January 15, several major banks began testing whether blockchain could be used in this way and the results looked promising, according to the Wall Street Journal.
Eleven different banks were able to use a private blockchain in order to exchange tokens across several continents. The test included big name financial institutions like Barclays PLC (ADR) (NYSE: BCS), Credit Suisse Group AG (ADR) (NYSE: CS) and Wells Fargo & Co (NYSE: WFC), and it is expected to pave the way for future blockchain investments. While this initial test provided only a small snapshot of what blockchain is capable of, many believe that its success will push banks to continue testing the technology and eventually put it into practice.
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