FinTech Blockchain: A Look Into A More Efficient Future

fintech blockchain

Blockchain technology is quietly transforming industries in ways that were unimaginable a few years ago. Transactions that once took days to complete, and multiple third-party verifications systems, can now be conducted more efficiently. Companies continue to recognize the power of blockchain in streamlining their financial dealings.

Today, FinTech blockchain applications are a normal part of the business world. The blockchain space is now over a decade old, and there are numerous government blockchain applications being tested. Here are some of the ways that FinTech blockchain changed the scope of global e-commerce.

Global Payments

Anyone familiar with the process of transferring money internationally understands that it is an expensive and time-consuming procedure. During the transfer process, valuable funds can be lost due to fluctuations in the global exchange rate of fiat currencies.

Conversion Rate USD vs Euro via XE

Conversion Rate USD vs Euro via XE

Recognizing these shortcomings in the current system, cryptocurrencies such as Ripple (XRP-X) created an international money transfer system that enables near-instant transfers of unlimited amounts for next to nothing. Today, there is an entire cryptocurrency sector focused on providing international money transfer solutions to individuals and businesses.

In September 2017, six major banks, including Barclay’s, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC and State Street, partnered to create their own native cryptocurrency called the utility settlement coin. This decision highlights banks’ growing interest in the cost-savings achieved through blockchain integration.

P2P Payments

Blockchain technology provides a true peer-to-peer payment experience. Bitcoin (Bitcomp), the world’s first cryptocurrency and largest blockchain, is described as “a peer-to-peer electronic cash system” in Satoshi Nakamoto’s Bitcoin white paper. This distinction is important because it is the exact opposite of how the current financial system operates.

In a traditional financial setting, you aren’t actually sending your funds directly. Instead, you are asking the bank if they could send funds on your behalf. If your bank approves your request, and only if they approve, the funds are sent to the other person’s bank. This process is expensive and requires multiple parties to monitor the transaction. Each of these organizations adds a small fee.

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