How to link banking systems and blockchain

From my point of view, the blockchain technology today is similar to the internet in the 90s. It’s overhyped, but there’s a reason for this popularity: it has the potential to reshape completely many areas of finances and commerce, including banks. In 2–3 years all banks will have to adapt to new changing conditions or to be wiped out by rivals. We can already observe the seeds of this process: the largest world banks start to use blockchain. There’s even the big R3 consortium built to research on the possible applications of the blockchain technology, which includes more than 200 banks and financial companies. As always, there’s a fierce competition where the big money is involved. But there’s also a strong demand for blockchain services, that’s why our eCoinomic grows so fast. If we talk about blockchain application, for me, there are several ways to use enormous resources of banks in blockchain economy.

Issuing stablecoins

Stablecoins are the coins whose value doesn’t fluctuate too much, so they can be used to keep the value of your crypto.
For such volatile market as crypto market, there should be a safe island where it would be possible to wait during the periods of a bear market. Stablecoins are a good solution to this problem, but there’s another problem: these coins must be backed with something. But in the case of banks, that’s not a problem, because they have literally tons of liquidity. That’s why I believe in the new USDC stablecoin by Circle, have you heard about it? Maybe in the future, these coins wouldn’t need to be backed by some other assets, being a thing on their own, who knows. Anyway, it’s necessary now, thus banks would be a perfect candidate.

Faster cross-border transactions

One of the reasons why banks are always being criticized — they use outdated technologies for transferring money cross-border, that results in slow clearance, these payments reach their recipients after up to five business days. In one SWIFT transaction, your money can be handled by up to 4 banks. Also don’t forget about these ridiculous fees. Why does it happen? The more intermediaries, the lesser the risk that your funds end up being stolen, it’s the question of trust. But each bank deducts its fee from your transaction along the way. Using blockchain technology can help reduce the fees significantly, and make the transfer instant and trustless. Banks aren’t happy with it, because they lose their fees, but as I said earlier, they don’t have any choice. And one more thing: all these transactions are stored forever in ledger, nobody can change or delete anything there.

Giving loans to people

The process of giving loans in decentralized anonymous society is highly complicated. We took the best from both worlds, fiat and crypto, and developed our platform.

eCoinomic.net wants to be relevant to the new digital economy, to the customers’ needs, thus we develop and promote our lending services. We want to contribute to this new age and become a part of it. If anyone wants to put his/her crypto to good use, without selling it, he can use our platform, take a loan, using his/her crypto funds as a collateral, and then return the money when he or she doesn’t it anymore, it’s easy. That’s a model how all banks will operate in the future.

Being the part of the system

As we see now, crypto now is becoming a part of the global financial system. In 2–3 years you’ll probably get used to paying in Bitcoin for your coffee and other purchases, paying your taxes in Litecoin etc. It will become a part of your ordinary life. But there must be a proper infrastructure built for this. The sooner banks will integrate cryptocurrencies the better for them. If someone wants to store his money in Bitcoin, give him this opportunity. Make it easier for ordinary people. Put ATMs everywhere. Give loans in stable coins, in the end you’ll be lending the same dollars, but in digital form. Over time, the volatility will decrease, because it will be a lot harder to manipulate this market. Someday all banks will have crypto on their balances, remember my word. You embrace the technology or you end up being outdated.

Liquidity providers

Also someone has to provide liquidity for all exchange and payment operations in pairs of currencies. Now banks provide an exchange service only for fiat pairs. But in the future, there should be a possibility to pay with fiat money, converting it from crypto instantly, just by sliding your card in card reader, or to pay with crypto, when you have only fiat money on your account.

Now there’s a good dozen of crypto card projects. It’s a big piece of pie, and it’s very unlikely that banks will give it away. They can issue their own cards that support both fiat and crypto, and still maintain their status.

​Everything I described here, is just a part of a bigger picture. But these are the crucial changes that have to be made. Big financial institutions and fintech companies are paying a great attention to blockchain. And in the future, this trend is likely to continue.