With cryptocurrenices gaining popularity, institutions in the banking industry are investing in blockchain solutions, or digital ledgers where cryptocurrency transactions are recorded chronologically and publicly, TechCrunch reports.
Blockchain projects are helping banks “to reduce, and possibly eliminate, settlement times due to their digital nature,” and securing “global currency exchange rate speeds and increased transaction security, among other benefits,” while potentially overhauling the industry as a whole in the future, TechCrunch says.
As a result, TechCrunch highlighted three big blockchain projects currently underway:
- IBM’s Hyperledger Fabric
This is a trade finance platform aimed at international payments using blockchain, which will run through the IBM Cloud, “allowing for interconnectivity between all parties in a particular secure transaction,” TechCrunch says. The project is meant to be scalable to allow multiple entrants to integrate into the financial supply chain process through the secure blockchain, which will enable transaction transparency.
Takeaway for decision makers: Transparency is key in this project –this will minimize the chance of a breach, and will help end users involved with the transaction process more quickly identify any snags or errors that might crop up, ensuring a smoother workflow and happy customers.
- The Utility Settlement Coin
The Utility Settlement Coin handles the use of blockchain solutions by traditional banks for more efficient transactions and currency backing, which prevents default and credit risk. These capabilities highlight why there has been high interest in this solution, and why banks are stepping into digital currency ecosystems: “The UTC is definitely a sign of fintech adoption in the banking industry, ensuring the eventual wide-scale use of blockchain technologies on a standardized level across the globe,” TechCrunch reports.
Takeaway for decision makers: Decision makers should consider taking note of the rapid-fire spread of blockchain technologies, especially in risky industries such as banking. Keeping tabs of these types of trends may lend a key as to where the currency marketplace is headed for other industries, and what steps decision makers need to follow to stay relevant and conduct safe and successful business with their customers.
One of R3’s major projects in the blockchain space includes the Corda platform, one of the first distributed ledger platforms that was introduced to the marketplace. With Corda, R3 has “future plans for an infrastructure network specifically geared toward financial institutions to build their own ledger-based applications and services, implying that these banks currently have and will grow their own teams of blockchain developers,” TechCrunch says. R3 is also focusing on “governmental acceptance” on the solution, which would showcase a shift in governmental compliance of this technology.
Takeaway for decision makers: Decision makers should consider if and when key stakeholders buy into a solution, such as blockchain technologies. This can indicate where industries are headed with their fintech investments, help decision makers and end users become aware of where there industry is headed, and adjust their sails to keep their institution prepared for change.