Mass Adoption of Blockchain in Financial Services: Regulatory Landscape
Key points
- Regulatory landscape: Mass Adoption of Blockchain
- Building Financial Service Applications
Blockchain is a technology over which cryptocurrencies like Bitcoin are deployed. In this technology, blocks, consisting of information are created and are joined together in a chain. The data in the blocks is recorded on the ledger and is distributed to all the users on the blockchain. This allows all users to access data at any given point in time. The data once stored on the blockchain cannot be altered by anyone, hence, ensuring complete security of the data.
It is very beneficial to banks and financial institutions. Many benefits related to payments, identity, record keeping, and trade finance can be enjoyed by financial organizations once blockchain gets successfully deployed.
For blockchain to be implemented successfully, governments and regulatory bodies must understand its potential and should develop a framework for its adoption.
Regulatory landscape: Mass Adoption of Blockchain
Blockchain in the financial sector has the potential to change the complete landscape of the industry. Governments and regulatory authorities need to adopt a practical approach that will help them in analyzing the potential of blockchain.
The decentralized nature of Blockchain, like that of a Bitcoin, may threaten the authority of central banks and governments.
But most countries around the world have identified its worth and accepted blockchain. There are trying to develop a pragmatic regulatory framework for blockchain and its associated businesses. The USA has started to work around it, regulatory frameworks are being developed in regards to the use of cryptocurrencies, in terms of blockchain they still have a lot of catching up to do.
However, various smaller countries like, Gibraltar, Malta, and Belarus are way ahead in this, they have already developed a regulatory framework for blockchain-based businesses.
Building Financial Service Applications
Building and implementation of blockchain financial service applications require thorough planning. Here are a few steps that one should consider.
Wisely choose between private and public blockchain. You will only want trusted parties to join your network, to ensure the security of the data, implementation of access control is necessary. The blockchain that can offer scalability and best performance is required to be implemented. In such scenarios, a private blockchain is the best option.
The enterprise blockchain framework to be implemented should be according to the requirements. It is recommended by experts, to use Hyperledger Fabric, as it is very mature.
The hosting provider for the blockchain should be the one that offers the best services.
The blockchain smart contracts must be properly tested, before being deployed.
Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as financial advice. Own research on the topic is advisable.
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