Just like a square is a certain type of rectangle, a blockchain is a specific type of distributed ledger. The blockchain is a protocol, not a product, and it is an open-source technology. Because it is located on the network rather than within a particular institution, anyone can access it at any time. We can construct a blockchain to record nearly everything of value and importance, including birth and death certificates, marriage licenses, deeds, titles of ownership, and educational degrees, in addition to payments and profits.
Blockchain is a new technology that is rapidly changing the technological environment. This Distributed Ledger Technology is widely regarded as a safe way to store and update data both within and across entities. Banking and financial services, smart contracts, voting, legal records, health records, internet identity, and DNS, accounting, sharing economy, social media, publishing, critical infrastructure, crowd-funding, human resource, energy supply, supply chain management, insurance, stock market, cloud computing, and so on are just a few of the reported use cases for Blockchain Technology (BT).
Blockchain helps banking and finance to create more open, inclusive, and secure corporate networks, common operating models, more effective processes, lower costs, and new goods and services. It allows for the issuance of digital securities in less time, at lower unit costs, and with greater levels of customization. As a result, digital financial instruments can be customized to meet the needs of investors, expanding the market for investors, lowering issuer costs, and lowering counterparty risk. According to a report by Jupiter Research, blockchain deployments will enable banks to realize savings on cross-border settlement transactions of up to $27 billion by the end of 2030, reducing costs by more than 11%.
In terms of infrastructure, blockchain is an open-source program that enables the real-time movement of digital assets between market participants. One can demonstrate a huge reduction in asset transfer costs and timeframes by using any preferred blockchain’s APIs. This technology offers a secure and cheap way of sending payments. These transactions are borderless, secure and mostly anonymous. This emerging technology can be a great disrupter to the traditional banking industry. Central banks such as the Bank of England are investigating creating their own e-coin backed by blockchain to compete with other cryptocurrencies as well as with credit card networks. The automation of business actions, which is the biggest burden in the current securities industry, will be another significant upheaval in the future. In order for crypto assets to be easily integrated and handled similarly to conventional financial products, blockchain must be directly integrated into today’s fundamental banking systems.
The term “Fintech,” which combines the terms “finance” and “technology,” is frequently used to refer to businesses or inventions that use cutting-edge technology to enhance or develop financial services. FinTech innovations are seen across multiple domains of payments, financial infrastructure, investment management and venture financing. With more people entering the digital asset space, decentralized finance (DeFi) will be more robust in security and scalability. It will transform the current centralized global financial infrastructure. DeFi is a new technology where the users interact as peers with algorithms or smart contracts rather than traditional intermediaries like banks or insurance companies. It solves the key problems of traditional finance like inclusion, inefficiency opacity, lack of interoperability and centralized control.
King’s College, Nepal is preparing students for a future in FinTech. BBA FinTech Program at King’s focuses on regulation, security considerations, and understanding the impact of technology on the market. This program also goes deep into individual technologies that help this growing field of FinTech. We regularly invite FinTech executives who have more up-to-date knowledge to speak on this ever-changing field of finance and Technology. I welcome you all to BBA FinTech Program.
