As per the reports from the Bloomberg released on 29th Jan 2019, it is believed by the experts working at the financial services giant JPMorgan that blockchain technology will contribute to the flourish payments system and banks.
Joyce Chang, JPMorgan’s chair of global research mentioned in a statement that “Blockchain isn’t going to reinvent the global payment system, but it will provide marginal improvements. The most meaningful impact will probably be three to five years away and mostly on trade finance.”
Chang reported that it is more common to find blockchain applications in trade-finance as digitization yields increased potential profits due to enhanced efficiency. She further pointed out that though cryptocurrencies have received ample attention in the process, it is more crucial to pay attention to the distributed ledger’s underlying technology. Mention of Interbank Information Network (IIN) was also there in the report by Chang. IIN comprises 157 member banks globally and was built by JPMorgan on their Quorum Platform, based on Ethereum blockchain.
The entity’s objective is to make sharing of information between financial institutions smoother and tackle the system’s challenges. It also aims to process transactions to recipients in a faster and more efficient way.
The report mentioned that Spanish banks such as Santander and BBVA are much ahead of their times in applying blockchain technology to flourish their businesses. In the last month of the year 2018, a loan amounting to €150 million was closed by BBVA applying blockchain technology with Porsche Holding. BBVA as per their declaration in April 2018 was the first bank to handle a complete loan process using blockchain technology.
BBVA and Santander have linked themselves to the European Union International Association for Trusted Blockchain Applications (IATBA). Both of these Spanish banks are believed to be first-adopters among the 5 financial institutions that got an invitation to join IATBA.
Blockchain technology is increasingly getting adopted for a lot of financial services. But as noted by Chang, there are four major roadblocks in way of its adoption: cost-efficiency, scalability, integration, and regulation.
At the beginning of this month, a bunch of researchers from the top universities of USA introduced an “internationally scalable decentralized network of payments.”
A cryptocurrency known as ‘Unit-e’ is being funded by Distributed Technologies Research as well. Distributed Technologies Research comprises of researchers from Stanford University, University of California, Berkeley and Massachusetts Institute of Technology.