The Adoption Of Blockchain By Banks

In recent years, we’re witnessing rapid changes in the cryptocurrency market and consequently new policies that are being implemented by mainstream banks in order to be able to seize the moment and expand into the world of crypto services. 

“The groundwork is now in place for more mainstream adoption of blockchain technology”

JP Morgan have stated “The groundwork is now in place for more mainstream adoption of blockchain technology at the same time that the foundation is being established for the development of digital currency and fast payments “ Bitqh app.

According to the US investment bank, in three to five years we’ll be moving greatly towards the adoption of blockchain in banking. We can have real-time safe transactions, by the combination of many users or companies on one blockchain, and there have been claims that this will be able to allow savings up top billions of dollars BI.

However, as of now, most attempts and corporate efforts are still being in the development stage. 

It is believed that this trend will continue with central banks and governments contemplating the idea of utilizing digital currencies on secure blockchains. This includes being able to move money in an instant between borders or countries, within seconds or minutes, a thing which would definitely lead to a complete transformation of the current global system, as the fastest transfer rate that currently takes place is at least three to five days. 

In recent years, we have seen many famous brand names investing and researching blockchain technology: Facebook with Libra, Gemini coin by the Winklevoss brothers, and JPMorgan with the JPM coin.

It is being said that during this time, the Bank of England is working towards research on creating a digital currency and a new digital Yuan is being developed by China.

Nevertheless, JPMorgan advises investors about holding Bitcoin and other cryptocurrencies in their investment portfolios.

By 2020, it is expected by more than 80 % of global bankers that blockchain will be adopted commercially, and it’s expected that this year, over half of global financial institutions are going to invest or at least they’re planning to invest in the technology.

Infosys Finacle conducted and reported in “Blockchain Technology: From Hype to Reality”, a survey of 100 financial service professionals and this was a key finding of the survey.

It was concluded by the same research that the average investment in blockchain projects is  expected to be about USD$1 million with 51% of CTOs and CIOs driving initiatives this year. 

It was also found that when it comes to spending more than US$10 million on their blockchain initiatives, only 4% of the survey respondents we’re positive that they had done so.

Half the banks are also augmenting their blockchain capabilities by working with a fintech startup or technology company.

The report confirmed that business areas where it is believed the transparency can be improved by the technology and processes can be automated across enterprises as well as reducing settlement and transaction time would be prioritizing Blockchain rollouts.

The study also revealed that payments across borders, management of digital identity, settlement and clearing, letter of credit process and syndication of loans are the main top 5 usage cases that are expected to go to production.

The most preferred type for 69% of banks was a private blockchain, where they can securely control access permissions by giving only a few users rights to modify or read them.

Ultimately, only 10% of respondents preferred a public or completely decentralised blockchain, where anyone can join the consensus process.