For the last several years, companies across a variety of industries have been pouring money into blockchain research in the hopes of getting in on the ground floor of the next big tech wave. There have been developments in blockchain uses in everything from POS systems for small restaurants to supply chain systems, and even in pharmaceutical compliance. For all of the spending, however, there haven't been all that many high-profile big-business use cases to really make a splash, with most of the development happening in behind-the-scenes applications that most people will never see.
The only real exception is within the industry where blockchain technology first rose to international prominence: global finance. As the underlying technology that makes all cryptocurrencies work, it's only natural that the financial industry would make good use of the blockchain before anyone else. For an update on how blockchain is changing the world of finance for the better, here are three use cases that illustrate the point.
Making Currency Trades More Efficient
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The first and some would say most important area in finance where blockchain is making big strides is within the realm of currency trading. Already, companies like CryptoRocket have made it possible for traders to deal in pairs made up of fiat and cryptocurrencies, uniting traditional monetary instruments with the latest in digital technology. That's not the only way blockchain's impacting currency markets though.
Big global banks are also using blockchain to conduct financial transaction settlements in real-time. The most notable example comes from HSBC, whose blockchain-based FX Everywhere platform has already handled more than $250 billion in transactions for the banking giant. The new platform has proven so reliable and efficient that plans are already in the works to open it up for use by large institutional currency traders, and to individuals further down the line. When that happens, it will mark one of the biggest blockchain success stories in the financial industry to date.
Linking Central Banks Together
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One of the biggest issues that plagues the global banking industry is the difficulty that arises when moving money across international borders. That's because there's no centralized information store that can transmit authenticated transaction information that can satisfy local compliance needs, such as know-your-customer regulations and the like. As a result, the current system suffers from slowdowns related to information and authentication requests as transactions go through local oversight.
Now, however, crypto-platform Fnality aims to change that with a truly global blockchain system for international financial transactions. The platform, backed by a consortium of 14 international banks, aims to create tokens of 5 major fiat currencies, with a separate system for each jurisdiction. The big innovation, though, would be that each system would have a direct link to the jurisdiction's central bank, providing instant transaction settlement capabilities in an IaaS solution accessible to all major banks. In one fell swoop, the system would revolutionize cross-border currency transactions and slash overhead in dramatic fashion.
Establishing Identity Worldwide
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Last, and perhaps most significant is the effort by professional services giant Accenture and Microsoft to create a blockchain-based global identification system. At first glance, such a system would appear to have little to do with global finance, but it may finally solve one of the biggest issues that the industry faces – the fact that 31% of all adults worldwide lack the documentation they need to use traditional financial services.
The system, which aims to fulfill the mission of ID2020 and a key provision of the United Nations' sustainable development goals could enable the global financial industry to nearly double its' market almost overnight. It uses a combination of biometric data and traditional identification sources (government documents, etc.) to provide a portable, multinational blockchain identity database. For the financial industry, as well as for participants, the system could be a complete game-changer that has the power to set off a renaissance of economic empowerment and development across the world.
The Native Home of Blockchain
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The real-world blockchain systems discussed here should make it plain that the global financial industry is the real and undisputed home of blockchain technology. It's the place where there's been the most production-ready development of blockchain systems, the greatest investment, and the clearest use cases. Without a doubt, it is there that the average person will likely come into contact with blockchain technology first and potentially in life-changing ways. That would go a long way toward fulfilling the promise of blockchain's initial purpose – to provide financial power and freedom to all, at all levels of the global economy.