Major Banks Join the Blockchain Race
According to Reuters, many banks have started testing applications based on blockchain, but few have yet to launch into production.
Several of the world’s largest banks and technology companies are joining to test blockchain-based applications. As you can remember from a previous post large banks and even the world's larger stock exchanges were frowning on the advent of any "new currency/asset" encroaching on their long standing market dominance. Well, as I continue to say, "if you can't beat them, join them." And no matter how much negative talk comes from the bank's Sr leadership, it is evident they see the writing on the walls if they keep their previous posture on the subject.
Recently, Barclays, Citigroup and IBM announced that they will participate in the conceptual version of LedgerConnect interface. LedgerConnect blockchain app store will permit banks to address applications easier and faster by concentrating on making it less complicated.
Blockchains are more commonly used in cryptocurrencies such as Bitcoin, but they can also be used in other transactions such as contracts, records, and as well as in other data preservation operations.
They work as follows: the user makes a transaction request; this request is processed in a personal computer network called “nodes”; the nodes then check the transaction; after the transaction is verified, the network creates a new “block” that joins all other transactions; and then the transaction is completed.
The uniqueness of the block chain is their nodes and blocks. The network is fully decentralized through the use of nodes and blocks, and since each node has the same transaction record, this makes fraud much more difficult.
Many banks from around the globe are taking a closer look at the many valuable uses of blockchain technology in their operations. Now, that doesn't go without skepticism from some banks, yet for the most part banks are using a variety of aspects of the blockchain's attraction to further their competitiveness.
For instance, banks in Kenya are seeking regulatory approval for the use of Distributed ledger technology (DLT) to facilitate payments and create credit scoring models. This way they can stimulate new services as a way to stimulate the trading activity of these banks.
In another case in the USA, Goldman Sachs and some of the largest financial institutions on Wall Street just completed a $32 million round of funding for the B series with a corporate blockchain start-up founded in 2013; Axoni. They are concentrating on a major partnership with the Depository Trust and Clearing Corporation (DTCC), which offers clearing and settlement services for processing transactions in the amount of 1.6 quadrillion dollars annually. (that's correct "QUADRILLION")
And the Korean Federation of Banks (KFB) will use blockchain to verify customer's ID in their banks. the KFB introduces business banks in South Korea to the use of blockchain technology and other establishments that have also been analyzing blockchain-based, cross-border transfers for business customers globally.
The inevitable adoption of blockchain technology with it's security features is appealing to any institution that requires a high level of safety and security of their customer's personal details. The risk-takers on Switzerland have taken the lead and opened for their customers a cryptocurrency bank account in their bank. It's a wonderful thing to see this happening even though the U.S. is far behind when it comes to banks getting onboard yet, the U.S. as the country with the highest amount of investments in blockchain and cryptocurrency projects worldwide. Yes, it is crazy but true.