Banking Institutions Experimenting The Blockchain Technology Should Know The Regulations

Banking Institutions Experimenting The Blockchain Technology Should Know The Regulations

Blockchain is practically an electronic databank which makes use of triple-entry bookkeeping and concord systems to create sense of ownership in thing

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Blockchain is practically an electronic databank which makes use of triple-entry bookkeeping and concord systems to create sense of ownership in things like securities and bitcoin. It is believed to be a superb banking technology that aids economize the processes of paying for goods and services, settling accounts and clearing trades. Even at its early age, blockchain technology has been experimented by several banks. But then, the standards, rules and practical applications of this technology make it a hard to implement technology. With so much emphasize on establishing winning technologies to replace the current market infrastructure, the value of intellectual-property is expected to grow vigorously.

Some Big Banks Consider Blockchain A Potential Disruption

Besides its superiority and dominance in the banking industry and sponsor of bitcoin, some banks, database companies and startups see blockchain as a potential disruption to the growth of the financial market infrastructure. This is allied to the simple fact that when banks and other financial institutions embrace the technology, they will be hinged to its rules and regulations among which aren’t yet written. In today’s strictly controlled banking industry, the endowment of clear and equitable rules cannot be underestimated as it enables businesses create products that meet market demand and are up to the regulator’s requirements. In January, several banks initiated and implemented a campaign to test the blockchain technology all with the intention to test its capabilities.

Clearer Rules Can Make Blockchain A Worthwhile Investment

Central banking regulators are yet to enact valid blockchain regulations. This has increased uncertainty among banking institutions that want to invest in this technology to simplify and intensify transactions. 2015 noticed an amplified number of startup investments related to blockchain as more banks, payment processors and private-equity companies invested in digital companies like Chain and Digital Currency Group. To cut a long story short, approval by the relevant regulation bodies is ideal in order to enable more payment processors and banks to adopt the use of blockchain technology.

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