Blockchain and Crypto

The state of blockchain in banking and finance

  • Industry leaders from banking, venture capitalist and startup perspectives offered their perspectives on the state of blockchain in banking and finance.
  • The implementation of blockchain-based solutions will depend on how quickly and easily governance structures can accommodate them.
close

Email a Friend

The state of blockchain in banking and finance
It's said that blockchain will transform the nature of financial services, but how large institutions will integrate the technology is still an open question. It was the core topic of discussion among industry leaders from banks, financial services companies, venture capitalists and startups who met in New York at Tearsheet's Bitcoin and Blockchain hot topic event Monday. Here are five things we learned: Institutions need to take a long-term view for blockchain applications. In thinking of future applications for the technology, the industry needs to think beyond what's possible now and look beyond -- much in the same way technology developers thought beyond the World Wide Web to streaming video and e-commerce. "The vision takes not a two to give year view but a 20 or 30-year view, and that's the context of what this is about," said Hadley Stern, senior vp of Fidelity Labs. Banks need to consider the risks and opportunities of being first movers. Participants debated the implications of pulling forward on technology that hasn't been fully tested in a traditional financial services environment. "By and large, fintech firms have moved on [banks'] territory and banks have learned a lesson," said Aite Group Senior Analyst Javier Paz. Some felt innovating too fast may draw the ire of regulators, while others saw it as an advantage in building the relationship with them. Among incumbents, use cases have moved from from the front end (payments) to back-end transactions. While the potential for blockchain-powered payments initially got a lot of attention, it was costly to implement. Incumbents are more closely exploring backend technologies like settlement and how assets are issued. Human-based structures will have a critical role in implementation. There is no clear winner among the enabling frameworks: "We have somebody who says you have to implement in Ethereum or Hyperledger or Corda -- how are we going to measure the performance of these different blockchains or distributed ledger technologies?" asked BNP Paribas Blockchain Strategist Vipin Bharathan. Instead, a collaborative "sandbox" approach, bringing together parties from the business an tech worlds, is more likely to bring about scaleable solutions. Blockchain will also change the way digital identity will be managed, and banks will have to rethink how they collect and utilize data. In marketing blockchain-based solutions, you need to be able to explain the value proposition to the client. The space for blockchain-based technologies will get increasingly crowded. Much has been said about its possibilities to make transactions more efficient and secure, but without a sales engine, technology providers can encounter roadblocks. KYC is not just for the regulators, but for the customers, too. Beyond the hype, technology developers need to be able to explain the benefit to the different types of consumers, including technical buyers and user buyers. A starting point is to understand the user problems that the technology is intended to solve. KYC is not just for the regulators, but for the customers, too.              

0 comments on “The state of blockchain in banking and finance”

Blockchain and Crypto

The rise of NFTs in politics

  • Donald Trump has reportedly collection anywhere from $100,000 to $1 million from sales of NFTs bearing his likeness.
  • While Trump isn't using his NFT sales to fund reelection, many other political hopefuls are- with limited success.
Rabab Ahsan | April 18, 2023
Blockchain and Crypto

SWIFT is taking the job of interlinking CBDCs across the world into its own hands

  • With countries around the globe experimenting with CBDCs, the digital currency solution is set to grow in popularity over the next few years.
  • To avoid fragmentation in upcoming solutions, SWIFT is experimenting with an interlinking solution that connects its current architecture to CBDCs.
Rabab Ahsan | April 03, 2023
Blockchain and Crypto

5 questions with Fireblocks’ Michael Shaulov

  • Fireblocks works with many of the largest global banks on blockchain and digital asset projects.
  • We asked co-founder and CEO Michael Shaulov some questions.
Zachary Miller | March 31, 2023
4 charts, Blockchain and Crypto

4 charts on the year of the ‘crypto credit crisis’

  • The collapse of multiple centralized exchanges has plunged the crypto industry into what CoinDesk calls a 'crypto credit crisis', with circumstances still unfolding today.
  • For a broad perspective on the market, we discuss the macro returns, Bitcoin and Ethereum's performance, and the state of capital raised for crypto funding over the past year.
Lindi Miti | January 30, 2023
Blockchain and Crypto, Member Exclusive

Bankchain Briefing: Banks onboard the blockchain train

  • The lawsuits and insults season is in full swing within the unregulated cryptocurrency space.
  • But cryptocurrency is just one facet of blockchain technology. Tearsheet asked experts for commentary on how traditional banks are experimenting with blockchains.
Lindi Miti | January 27, 2023
More Articles