BLOCKCHAIN: IMPACT ON THE FUTURE OF FINANCIAL SERVICES SECTOR

 

BLOCKCHAIN: IMPACT ON THE FUTURE OF FINANCIAL SERVICES SECTOR

 

Blockchain is being hailed as the next big thing after the creation of the internet and has emerged as one of the most groundbreaking applications. This technology will have a major impact, particularly in the financial sector. Blockchain primarily a distributed ledger technology (DLT), has the potential to revolutionize well-established financial institutions because of its lower costs, faster execution of transactions, improved transparency, auditability of operations, and other benefits. Blockchain technology ledgers have innovative benefits over traditional approaches which facilitate bilateral settlement by eliminating intermediaries failures, delays, collateral costs, minimize credit risks, faster implementation of transactions, enhanced transparency in operations, amongst others. 

Blockchain technology is a structure that stores transactional records, also known as the block, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this storage is referred to as a ‘digital ledger.’ The banks like JP Morgan Chase, Bank of America, and Goldman Sachs are actively involved in blockchain technology for their operational activity. Blockchain has the potential to reform the financial services sector by plummeting potential costs and labor savings. Blockchain technology could also make the Trade Mark Registration service In Delhi more efficient by cutting down on some of the tedious processes and procedures.

Blockchain technology includes three main properties of Decentralization, Transparency, and Immutability. Each and every transaction is automatically stored in the block and added to the chain. Each block is endorsed by an individual entity which is secured by using electronic cryptography to safeguard the reliability of the database.

Blockchain reduces conflicts, confusion, and delays in many aspects of financial services. Further, blockchain represents a new form of trust. Blockchain has a tremendous potential to metamorphose the workings of smart contracts, crowdfunding, supply chain auditing, file storage, prediction markets, protection of intellectual property, internet of things, identity management, AML/KYC, data management, stock trading and to transmute theses activities by plummeting potential costs and labor savings. In India, the existence of Bitcoin or any cryptocurrency is unregulated, but not illegal. Recently, Union Finance Minister Nirmala Sitharaman has clarified that there will not be a complete ban on cryptocurrency and this declaration has supported the world of digital money extensively in India as a market that is as vast as China.