Úno 08

R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance

Source: bitcoin

Bitcoinist_finance

To many people, it seems inevitable that the blockchain will be a part of global financial services in the years to come. With multiple financial players actively working on projects revolving around distributed ledger technology, it only seems to be a matter of time until both worlds come together. However, the progress of introducing blockchain technology in financial services will not happen overnight, and there is plenty of work to be done.

Also read: How The Blockchain Will Change Real Estate

The Many Advantages of Distributed Ledger Technology

There is no denying the blockchain can offer a multitude of benefits to established financial players. Among the positive aspects are speeding up transactions by a significant margin, reducing overhead and transaction costs, and creating a global financial network. None of these benefits are possible through the legacy system financial players are using today.

Furthermore, there are security benefits to keep in mind as well. Rather than using centralized points of failure to record and process transactions, a distributed ledger would even out the workload among different locations and increase service uptime to as close to 100% as possible. However, that does not means banks are not looking to exert some control over what happens on the blockchain, which leads to the creation of alternative distributed ledger systems.

When people think of a blockchain solution for financial players, no one should expect them to use the distributed ledger powering the Bitcoin protocol itself. Instead, private blockchains will be created, which will remain in full control of banks and other institutions. To make matters worse, private blockchains cannot communicate to one another without using a third party service provider.

But that is not the only worry, as the term “blockchain” is being used for a variety of technological concepts, regardless of whether or not distributed ledger technology is involved. While it is only normal to see great excitement go hand in hand with technological innovation, overusing the term can lead to so-called “blockchain fatigue”, which will stifle growth in this sector.

Implementing distributed ledger technology in the financial word we know today will not be an easy task. Banks will not relinquish their control over consumer’s funds that easily, although their attention on the blockchain – through projects such as R3 CEV –  is a step in the right direction. At the same time, this technology could end up disrupting the banking industry altogether, and there will always be a certain level of caution when talking about distributed ledgers.

Solving Problems One Step At A Time

Furthermore, many Bitcoin users feel how the blockchain will eventually replace the banking infrastructure present today. If this were to be the case, distributed ledger technology would bring financial services to the unbanked and underbanked regions of the world. This powerful protocol we call the blockchain certainly holds all the cards to make that idea into a reality.

That being said, the future might not be as black-and-white as some people imagine it to be. The blockchain can either completely change the financial world as we know it, or complement it and create an economic ecosystem anyone in the world can use. In the end, all that matters is that financial issues are being solved one way or another.

What are your thoughts on the distributed ledger technology in finance? Will it complement or replace/ Let us know in the comments below!

Source: Finextra Paper

Images courtesy of Shutterstock, R3 CEV

The post R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance appeared first on Bitcoinist.net.

R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance

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Led 28

Bank of England Considers Distributed Ledger Technology To Revamp UK Financial Infrastructure

Source: bitcoin

Bitcoinist_UK

Hardly anyone can deny the financial ecosystem will need to undergo an overdue change sooner rather than later. The legacy system is not able to keep up with growing consumer demands and needs. Over in the United Kingdom, the Bank of England will develop a blueprint for this overhaul,  focusing on new payment preferences and distributed ledger technology.

Also read: Japanese Exchange Bitflyer Invests in a Blockchain Based IoT Program

Bank of England Looks At Distributed Ledger Technology

Revamping the UK’s entire financial ecosystem will be quite the challenge, even for the Bank of England. At the same time, a lot of work has been done already, as consumers are flocking to new forms of payments. Furthermore, other major banks are focusing their attention on the blockchain, which provides distributed ledger technology to financial institutions and consumers all over the world.

This announcement comes on the heels of the “nudge” received by the UK government to venture into the world of distributed ledger technology. Creating a more transparent, cheaper, and widely accessible financial infrastructure will be beneficial to people from all over the world, and allow Bank of England to grow their customer base on a global scale.

Especially where the settlement of payments is concerned, there is a growing demand for faster solutions. Keeping in mind how one-third of the UK’s annual GDP is settled every day, the legacy system is unable to keep up with these transactions, causing major delays. This situation needs to be addressed very soon, and proper testing will need to take place to locate any key issues.

The last thing the UK economy needs would be for the heart of its payment system to fail utterly. When consumers are unable to send and receive payments through traditional means, the UK economy will take a major hit. Some of them might even look for alternative solutions, such as bitcoin and other digital currencies.

That being said, Bank of England is well aware of how distributed ledger technology and digital currencies can help them create a far more secure and stable financial infrastructure in the future. By giving every player in the distributed ledger technology network an identical copy of the ledger, settlement can take place much faster, as there is no one central party overseeing every transaction.

Real-Time Payments Versus Financial Security

Another issue that needs to be addressed by the Bank of England is how consumers are favoring real-time payments these days. While this sounds like a good solution on paper, it is creating headaches for legislators looking to prevent money laundering, identity theft, and terrorism financing.

Bitcoin provides a solution in every regard, as the digital currency is too transparent for money laundering or terrorist financing purposes. Tracing transactions on the blockchain can be done by anyone in the world, at any given time. Plus, there is no room for identity theft in the Bitcoin world either – at its core, at least -, as every wallet address is unique.

What are your thoughts on the Bank of England task to revamp finance? What role will distributed ledger technology play? Let us know in the comments below!

Source; Finextra

Images courtesy of Shutterstock, Bank of England

The post Bank of England Considers Distributed Ledger Technology To Revamp UK Financial Infrastructure appeared first on Bitcoinist.net.

Bank of England Considers Distributed Ledger Technology To Revamp UK Financial Infrastructure

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