How could Blockchain Technology disrupt the finance sector?
With shared databases and cryptography, blockchain allows different parties across the globe to access an updated and unalterable digital ledger simultaneously. The blockchain is the most innovative technology that enables Litecoin, Bitcoin and other digital currencies to be anonymous, secure and transparent. Also known as a public ledger, the blockchain contains metadata about how and when the transactions occurred.
The blockchain database is secured cryptographically to prevent tampering with current and previous transactions. Since blockchain does not require a centralized authority to bring trust in the system, it reduces processing costs added due to the involvement of intermediaries.
Trending Cryptocurrency Hub Articles:
1. VeChain Price Prediction 2021
2. Why I Don’t Waste Time Investing In Bitcoins
3. How to launch a token on Stellar Blockchain Network?
4. How and Where to Buy DWS (DWS) — An Easy Step by Step Guide
As banks currently involve a lot of paperwork, lengthy procedures and a lot of intermediaries, it adds high transaction costs for the customers. Implementing blockchain in banking would make financial institutes more valuable and profitable.
Reputable banks across the world are experimenting with the blockchain for various use cases like record keeping, money transfer and other banking operations. By shifting the paperwork to an electronic decentralized ledger, you can access all the information from a single source without compromising security and data integrity.
Let’s look at some of the use cases of the blockchain in the finance sector.
Use Cases of Blockchain in Finance:
- Clearance and Settlements
An application built on a distributed ledger can reduce high operational costs and bring transparency with real-time transactions between financial institutes. - Cross-border Payments
By introducing a decentralized ledger, blockchain technology can facilitate cross-border transactions quickly at lower transaction fees. It does not require the involvement of intermediaries like banks and other financial institutes. - Securities
Tokenizing traditional securities like bonds, stocks and real-world assets and placing them on the blockchain can create interoperable and more efficient capital markets. - Loan and Credits
By eliminating the need for intermediaries in the credit and loan industry, a blockchain solution can make it more secure to borrow and lend money quickly and at lower interest rates. - Trade Finance
Replacing the cumbersome and paper-heavy bills of lading in the trade finance industry with a blockchain based solution can bring transparency, trust and security among trade partners globally.
Two banks, HSBC and Standard Chartered, have joined consortia focused on blockchain to fix trade finance. Disruption never happens overnight; you need to get in touch with a team of blockchain development experts to understand the potential of blockchain and learn how to implement it.
Don’t forget to give us your 👏 !
