The Blockchain Facing the Challenge of Global Adoption in the Financial Sector

Banking in the current financial system is characterized by high transaction costs. In addition, the Blockchain is timely, suggesting that technology can significantly reduce transaction costs and increase the efficiency of cross-border transactions.

However, doubts about the potential of the Blockchain are circulating right now. Its ability to resolve issues related to transaction fees that warrant large-scale application is in question. Major financial institutions such as the Central Bank of Russia, the Bank of Canada and the Central Bank of the Netherlands have expressed the above concern.

This concern came some time after the Western Union CEO said that the use of the Ripple (XRP) did not have any significant transaction cost benefits even after six months of usage testing.

An impending rivalry

Although the XRP is criticized by many members of the cryptocurrency community and industry fans, the comments circulating here are equally significant.

Alex Karasulu , the director and founder of OptDyn technology, thinks the Western Union cross-border transfer service is threatened by the Blockchain . This is a competing technology.

"At first glance, the negative comments make the devil's advocate re-emerge in all of us. Nevertheless, by looking deeper into the sources, we find opposite effects. The comment on the Ripple comes from the Chief Executive Officer of an established money transfer service. Western Union competes directly with the Ripple and the Blockchain as a whole, which is trying to suppress middlemen like them. Western Union's activities are seriously threatened by Blockchain technology and their negative comments are not at all surprising. This reinforces the Ripple's offer more than it does at night, "said Karasulu.

In addition, banks should adopt Blockchain technology. It has notable benefits that far outweigh the disadvantages. Juan Imaz, the founder of Profede supported this argument by saying:

"Banks will always criticize the Blockchain and the crypto-currencies because it is the currency of the people. It can not be controlled by financial institutions. Banks react suspiciously to these projects and are nervous because digital currencies can take control of the banking system. Banks should, instead, adopt the technology behind these change projects, the Blockchain, because its advantages outweigh its disadvantages. "

Meanwhile, startups such as URAllowance, SportsFix and AnthemGold, believe that the large distributed register could offer many benefits including "proof of work, process, warranty and delivery" according to Reginald Ringgold, the founder of BlockVest DEX.

Echoing Ringgold's comments, Imaz said:

"With Blockchain, crypto-currencies replace intermediaries as trusted keepers, thanks to all Blockchain participants running complex algorithms to certify the integrity of the entire network. In the best case, the Blockchain and other digital platforms should do for the global value chain what shipping containers have done for the physical transport of goods. "

A long road to maturity

To promote financial inclusion in the financial sector, finance ministers from major economies have highlighted the growing potential of Blockchain technology after this year's G20 meeting.

Announcements from major world-renowned banks such as the central banks of Russia, Canada and the Netherlands are expected to favor the growing adoption of Blockchain in the banking sector.

The challenges of price stability, speed and scalability could be met by the massive adoption and widespread application of the large distributed registry, said Jerry Floros, CEO and founder of MoneyDrome Edge Ltd.

"The crypto-currencies and Blockchain are still far from maturity and mass adoption. While virtual currencies face issues such as price stability and regulation, the Blockchain needs to overcome the challenges of speed and scalability. While these new technologies are developing at an accelerated speed, it is only a matter of time before they get better and become en masse and applied on a large scale. "

For his part, Thomas Labenbacher, the CEO and co-founder of Bank52, believes that Blockchain will continue its momentum. It will grow and solve the problems that hinder its scalability.

"All technologies are incremental and the Blockchain is no different. I am sure that over time, there will be improvements and changes, especially with respect to scaling and speed issues. The Blockchain is important for B52, but only in certain aspects of the transaction - the entire offering is not based solely on the technology of the large distributed registry, "announced Labenbacher.

The CEO of Bank52 is one of the top 30 Fintech influencers. He is also co-founded by the Fidor Bank Group entities, has signed a partnership with the Life.SREDA Venture Capital Blockchain fund and has been named Western Union's sales director. This businessman firmly believes in the revolution and transformation brought by digitization in traditional banks. He believes that digital banking and cryptocurrency services are the future of the financial industry.

Do you think Blockchain technology can meet the challenge of massive adoption in the finance industry? React in the comments below.