Banking on Blockchain – WWD
Blockchain technology is gradually but surely making its way to the banking and finance industry and is capable of changing the overall security of the banking sector. From money transfers to securities trading to cross-border payments, blockchain technology is designed to impact how global transactions are implemented and digital assets are kept secure.
Blockchain technology will change the future of the banking system in many ways. For example, increasing security, reducing fraud, human error and fees for banks and customers, speeding up international transfers, potentially eliminating brokers and commissions, simplifying lending for lenders and borrowers, and through various use cases.
Deepak Thapliyal is the CEO of Chain, a blockchain-based technology company to enable a smarter and more connected economy. They form cryptographic ledgers and cloud infrastructure that power transformative financial products and Web3 services. Founded in 2014, Chain has raised over $40 million in funding from Khosla Ventures, Pantera Capital, Capital One, Citigroup, Fiserv, Nasdaq, Orange and Visa. In 2018, Chain was acquired by Stellar to form Interstellar, a commercial arm of the Stellar Foundation. However, in 2020, Chain was reacquired to continue its mission to form a healthier global financial system through blockchain and cloud technology.
According to Deepak, banks are the biggest beneficiaries of Chain’s blockchain product. Chain previously worked with banks to launch a private settlement network between Citibank and Nasdaq for instant settlement in a pilot program. “We helped construct an on-demand settlement pilot for Citibank and Nasdaq as well as Visa to show how effective blockchain can be for their business. All banks should add blockchain to their programs and decommission their legacy systems,” says Deepak.
Blockchain technology can make international transfers and money transactions faster, more cost-effective, transparent and more secure. Currently, transactions can take several days and involve various third parties transferring money from one country to another. These parties each take their cut from the transaction. By the time the money reaches its destination, the sender may have lost a significant amount. For international businesses and consumers, blockchain technology facilitates faster and easier peer-to-peer transactions more efficiently for international businesses and consumers, i.e. through a Bitcoin wallet.
Blockchain helps reduce fraud as it generates a clear audit trail. It also has multiple redundancies, so it is almost impossible to change information once it is uploaded to this network. Many computers preserve the Blockchain network, eliminating a key point where hackers can attack the network and alter data without leaving evidence. This aspect of blockchain makes it extremely relevant in the current global scenario of widespread cybercrime and ransomware attacks that can compromise sensitive data and cause significant financial losses to victims.
“Continue to protect Windows and use a VPN for added security. Also, see a ransomware checklist to ensure you’re prepared with the right cybersecurity strategy in case you become a victim of a cyberattack,” Deepak adds.
The innovative CEO’s goal is to bring its product sequence by chain into the hands of various banks and organizations, hoping to encourage them to pilot the program to see the cost productivity and value it has compared to their outdated systems. Notably, companies are actively employing blockchain engineers for listed companies and banks. Large brokerages such as Fidelity have launched their own NFT departments, and institutions such as JP Morgan have also built private blockchain projects in-house.
