By 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…