Banking organizations are actively examining blockchain opportunities in order to apply this technology for their purposes. However, not a single bank has built a functional blockchain ecosystem yet. Nevertheless, excitement of the blockchain is continuing. So, what is the reason?
The fact is that blockchain advantages allow not only to create a new banking data management system but also to save money literally everywhere. Some people compare a potential impact of the blockchain in the financial sector with the way the Internet has influenced it.
According to the research of IBM institute and Economist Intelligence Unit, blockchain key application areas in banking organizations are related with making payments in cryptocurrency: retail payments, consumer crediting, cash operations, trade financing, corporate crediting, mortgage loans, deposits, international payments and reference data.
Besides, the investigation stresses that only 15% of banks will start implementing blockchain by 2018. Since 2018 to 2020, 51% of banks will massively implement blockchain in their operations. And just after 2020, there will be 34% of followers, making sure in blockchain efficiency and deciding to use this technology.
One of spectacular examples of blockchain and smart contract application is a tandem of 7 Airlines and Alfa Banks. They managed to conduct an international letter of credit as a transaction via Ethereum blockchain. The transaction period decreased from 14 days to 23 seconds. Comment is needless.
Kazakhstan is also going to integrate the blockchain, but into the short-term obligation trading sector. The Central Bank of Kazakhstan is developing blockchain solutions to conduct daily auctions on selling short-term notes with a repayment period ranging from seven days to one year.
The SWIFT system can be one of the most spectacular blockchain examples in the banking area. This interbank system has started testing blockchain for transferring information and making payments. SWIFT was joined by more than 100 financial institutions.
Central Bank of Belarus developed a blockchain-based information network in its banking system. The system has already processed information on bank guarantee issuing. According to authorities, the next stage will be blockchain implementation in the securities trading sector.
The Central Bank of Russia also stays abreast with this trend. Due to numerous sanctions, Russian banks can’t connect to the SWIFT system, thus the regulator has created its own analogue: the service for transfer of financial messages (SPFS). Currently, the Central Bank is shifting it to the blockchain for protection maximization.
Despite the abundance of successful examples, not all blockchain opportunities and features are explored to a full degree. Its integration is frequently limited to testing stages and application announcements. However, experts believe in the blockchain efficiency and predicts the technology a promising future.
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