Blockchain technology’s advance through the finance world continues apace. As part of this progress, Blockchain is becoming more and more integrated with traditional finance systems.
A number of approaches are being adopted by financial institutions to integrate Blockchain tech.
Trade finance platforms using Blockchain are helping banks such as HSBC to streamline operations and carry out secure document sharing, while leverage of APIs (Application Programming Interface) to integrate digital assets into traditional banking systems is also becoming more prevalent.
Here are some of the main ways in which Blockchain integration is helping transform the traditional finance sector.
Transaction processing:
Blockchain’s real-time processing abilities mean transactions can be executed in a matter of seconds, not days.
Reduced costs:
Transaction fees for cross-border and FX payments could be cut by up to 80% when traded on-chain, saving billions per year according to Uniswap.
New financial services:
Smart contracts are helping to pave the way for new financial products to be provided by institutions, such as programmable loans.
New investment opportunities:
Integration of digital asset custody and exchange services mean banks can offer their customers crypto trading possibilities on their existing platform.
As Blockchain continues to integrate, financial services have the potential to become more accessible, cross-border transactions will have lower barriers, and processes and transactions will become more automated and efficient while maintaining security.
The descriptions provided above are all based on publicly available information, and cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include Investopedia, FinTech Magazine and Forbes. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.