Banks Embracing Blockchain for Enhanced Payments and Improved ICO Processes

Banking CIO Outlook | Monday, August 05, 2019

Blockchain transforms everything from payment operations to how the private market raises cash. How ready is the traditional banking industry to adopt this technology?

FERMONT, CA: Over the past few years, blockchain has earned a lot of attention, propelling beyond the praise of bitcoin niche fanatics and the banking professionals and investors' mainstream discussion. One prospective enabler of the financial industry stems from apps incorporating blockchain technology— the tamper-proof system of distributed ledgers underlying cryptocurrencies. Here are a few blockchain applications in the finance industry.

Payments and Remittances

Blockchain technology's most evident and fundamental use is its use as a payment scheme. Bitcoin and other cryptocurrencies function as both digital money and a way to send payments around the globe in that cash form. These transactions only involve an internet connection and are carried out immediately. These are borderless, safe, and mainly anonymous transactions. Also, transaction costs are minimal, costing just a few cents per transaction, making sending cash around the globe much cheaper.

Secondary Market Trading and Clearing

The most comfortable acquisition of the shares of a company to a complicated over-the-counter currency swap involves trade clearing and settlement. Ownership of the asset or agreement to be traded must alter hands verifiably and be registered. Today, exchange charges and clearing charges are added to the price of each trade and, given big amounts of orders, can become significant over time.

Primary Market Issuance and IPOs

Can main markets also exist if secondary market trading can take place on blockchains? The reply is yes. Imagine a business that seeks to increase capital by issuing fresh stocks through an IPO to the public. On secondary markets, which also occur via the blockchain, these virtual shares can then be exchanged.

The economic sector considers blockchain technology as a transformative enabler. Blockchain technology becomes much more than bitcoin or other cryptocurrencies. While those implementations as payments and cash systems are progressive, indeed, the higher proliferation may result from alternative uses of this distinctive and robust feature.

Check Out : Top Blockchain Startups

Weekly Brief

Read Also