In a nutshell, blockchain technology is valuable because it can revolutionise the global financial bureaucracy as we know it.
Blockchain is an indelible, secure, encrypted, and decentralised digital ledger that records transactions on every computer that trades or mines cryptocurrency. While this technology has many other potential applications spanning across several industries, it’s been most disruptive as the technology that’s behind cryptocurrency.
One of the most direct ways in which blockchain is changing the face of global finance is the development of Kryptos-X – the first cryptocurrency exchange platform that’s aiming to work with the people and institutions who want to regulate crypto.
The man behind the plan is Tony Mackay of Chi-X Australia – also known as the first alternative to the Australian Stock Exchange. Following the success of Chi-X Australia in which almost 2000 ASX-listed stocks are traded, Mackay hopes to include cryptocurrencies in his empire of regulated stock exchanges across the world.
“We will ensure the Kryptos-X marketplace launches with a state-of-the-art platform that is robust, secure, compliant, liquid, efficient and can accommodate the rapidly evolving trading environment for digital assets,” explains Mackay.
In short, by being open to institutional regulations, he’s ironically found a new way to make cryptocurrency even more disruptive to the larger picture of global finance.
In a way, crypto company Ripple is on the same path. However, instead of the global stock market, Ripple has set its sights on cross-border payments instead.
Upon signing a deal with SAMA (Saudi Arabian Monetary Authority), Ripple has launched a program that allows banks in the Kingdom of Saudi Arabia to use xCurrent. As a blockchain-based banking solution, xCurrent will allow Saudi banks to make cheaper cross-border payments, lowering international barriers to commerce and trade.
This also means that SAMA is the second central bank that has adopted blockchain-based tech, with the first being the Bank of England in 2017.
Obviously, the foreign exchange market is also being directly affected by blockchain technology.
Forex is the decentralised market by which international currencies are traded with one another. In an article by FXCM titled ‘What is Forex?’ it states that the US Dollar and the Euro (EUR/USD) is the most traded currency pair in the Forex market.
The changes to the financial landscape mentioned above have made it easier now more than ever to trade foreign currencies. While blockchain looks far from actually being a viable replacement to traditional banking, it’s certainly changing the ways in which fiat currencies are being traded, as well as how banks are being run.
The physical gold market is another financial institution that blockchain is disrupting.
CEO of US Global Investors Frank Holmes shared with Streetwise Reports how mining companies need to adapt to the changing rules being laid down by blockchain innovations.
The inherent logistical requirements of a physical product like gold – finding, mining, refinement, delivery, storage – makes it difficult to trade with compared to fully digital assets. If gold is to attract investors, precious metals companies should be more succinct with presentations as well as open to new ways to market the product.
Whether or not you agree with the burgeoning widespread use of blockchain-based technology, it’s certainly making its mark on our global financial institutions today – with foreseeable revolutionary results in the near future.
Contributed by Luis Burke