Blockchain weekly digest — frictionless finance
By Emily on The Capital
Dictionary: frictionless — adjective — achieved with or involving little difficulty; effortless.
Blockchain promises so much, but as with any new technology, it can be confusing to decision-makers as this technology goes against current digital business transformation strategies.
So, how do you know if you are backing the right blockchain solution?
In these weekly digests, you will get the highlights of blockchain news from around the world, which will give you an insight into the themes developing with this innovation.
Preamble — blockchain is a collaborative technology
In last week’s digest, one of the themes was blockchain associations and how an association or consortium plays a significant role in developing business blockchain strategies.
Blockchain associations or consortia are essential for enterprise adoption success because, with this technology, you cannot go it alone. It requires not only developing new business models but collaborative and unique operating principles for open source and distributed technologies.
The reason for this is blockchain technology is part of a collective group of technologies offering new business optimization solutions that are outwith current business norms.
1. Ant Financial Services
One prominent blockchain financial services company that is part of the new China blockchain association — National Blockchain and Distributed Accounting Technology Standardization Technical Committee — is the Ant Financials Service Group an affiliate company of Alibaba Group.
This week Ant Financial launched a new open-source platform for developers and subject matter experts (SMEs) to take advantage of their blockchain innovation.
“Through the launch of the OpenChain platform, we aim to help one million SMEs and developers innovate and explore more use cases in the next three years,” said Jin Ge, General Manager of Blockchain Platforms at Ant Financial.
Blockchain has had it’s the most significant impact so far in financial services. The strategy is to enable optimization for crucial areas such as compliance and risk, global trade, and automation of settlements.
These key areas enable financial houses to streamline otherwise traditional and labor-intensive services, thereby ultimately saving money in operating costs.
Currently, the Asia Pacific (APAC) region is leading in blockchain adoption. According to research, APAC has three times the amount of live blockchain use cases compared with North America.
2. Frictionless finance
Smart contracts help to enable frictionless finance, as stated by Algorand, a leading blockchain solution.
I think we are only at the beginning of where our blockchain projects could get to with these nifty decentralized applications.
As more use cases come to life, and developers learn blockchain programming. You will see more businesses and blockchain projects innovate and collaborate on credible open-source projects like Algorand’s. And there will be an explosion of new solutions for frictionless financial services and payment solutions.
3. A European leader?
A report out this week sees The Dutch Central Bank think that the European central bank digital currency (CBDC) should use the best elements of cryptocurrencies for a European digital currency solution.
De Nederlandsche Bank wishes to play a leading role in developing CBDC, noting that they have seen a decline in physical cash payments. They believe that blockchain solutions could enable a wave of disruption in the banking sector, which they would like to become European leaders in evolving innovative cashless solutions.
Extract — DNBulletin: Digital currency issued by central banks can protect public interests in payment systems;
“We believe some public type of currency for general use must remain in existence. To make the new type of currency work, it will need to be attuned to the needs of its users, whose payments are increasingly digital.
If the decision should be taken within the Eurosystem to experiment with some more concrete type of CBDC, we are ready to play a leading role. The Netherlands provides a suitable testing ground for such an experiment.”
De Nederlandsche Bank seems to be looking forward to a future of finance using blockchain technology as a new way of trading. This forward-thinking innovation strategy will help to future-proof its payment systems and enable them to be a leading European digital player in a global marketplace using crypto-style solutions.
4. Seeds of change
Fintechs and blockchain innovators are building new payment applications and services to challenge retail banking services.
In the first wave of these challenger banks (not on a blockchain) we saw with start-ups like Revolut and Starling Bank, who bought banking principles to the customer with innovative mobile applications.
But can blockchain do it better? Many believe so. Blockchain offers the highest security at the foundational level of a net-new solution.
Artificial intelligence and blockchain technology are the most apparent technologies to address the optimization and transparency of financial and banking services.
According to Gartner, more than 80 % of the most significant successful blockchain projects will be outside financial services by 2023.
Conclusion
Financial services were the most likely place to start for the fledgling industry because blockchain is all about empowering trust and truth in a trustless society.
Central banks and start-ups alike are exploring borderless payment solutions using blockchain technology.
You are now seeing the foundations for enabling new payment services for a future of optimized frictionless finance, and it is well-worth considering blockchain to be part of our future-proof strategy for you and your business.
If you liked this weekly digest, please check out my other insights here or follow me on Twitter!
Stay safe, folks!
Emily @BlockhchainScout
