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Learn MoreBlockchain is slowly transforming Financial Services Industry (FSI). A lot of conventional firms are now focusing on “distributed ledger technologies” for the digital currency called the Bitcoin. Emphasis is on increasing the generic blockchain uses for areas like trade settlements, clearing, payment systems, commercial paper and others. All of this is in trial and testing phase.
So where will these trials and concept tests lead the FSI? There are high chances that most of them would get blended with existing systems. Some of them may never see the light of the day. But forecasters are hopeful that new and positive trends may emerge out of blockchain application like:
- Lower post settlement costs
- Reduction in transaction-settlement time from days to minutes
- Shifting to Digital-based trust from Paper based records
But, getting workforce oriented with new blockchain digital transformation could take time – a lot of time. It is not easy for people to quickly shift from paper based procedures to digital based trust immediately.
So is it all plain sailing for FSI companies regarding implementation of blockchain? There are some realistic regulatory issues:
- Trust
- Conflict of interest and dark pool trading
- KYC and Trust
At this point, collaboration between FSI and regulators is minimal or disjointed at some points. But thankfully some of the regulators are ready to investigate blockchain’s meaning for US & Europe. There is also an opportunity for financial regulators to regulate with increased transparency. Since regulatory compliance software technology for blockchain is in somewhat “upcoming” phase, regulators may have to invest on their own considerably to get the grab of it. Only then they’ll be able to properly regulate its use.
Source: Jim Hurley / CorporateComplianceInsights.com
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