Crypto currency is a digital or virtual currency designed to function as a medium of exchange. It utilizes computerized encoding and decoding technology to secure and verify transactions, and control the creation of new units. To help accountants and financial professionals gain a strong understanding of crypto currencies, the new blockchain technology supporting them, and the role they’ll play in our capital markets.
Digital currencies such as Bitcoin threaten to shake up the financial services industry, enabling organizations to facilitate secure transactions more swiftly than today’s asset exchanges.
Bitcoin’s blockchain technology, a decentralized digital ledger that verifies transactions between parties, can process trades, bonds and others in record time, ultimately improving the client experience. That untapped potential is a big reason why business organizations are building innovation labs to test other crypto currencies, among other digital technologies, for future use.
Blockchain, as the digital ledger, will heavily impact the way we do business in the financial services industry.
Blockchain makes cryptocurrency legit for financial services
Bitcoin and its ilk have been shunned by banking executives because they lack the backing of a centralized bank and have been used to conduct illegal transactions, such as buying and selling drugs and weapons online. Yet banks such as Bank of New York Mellon and the Bank of England have warmed to crypto currencies as renowned technology experts have championed the blockchain for its potential to shake up the financial services sector.
Banks have over the last two decades reduced settlement of stocks, bonds and other assets, which involves communications and vetting from multiple parties, from five to two days. That time lag between transaction and settlement time courts financial risk. But financial services firms using a blockchain to facilitate trades could complete transactions in record time, because the technology serves as an unimpeachable authority that doesn’t require vetting between multiple parties.
Blockchain, the technology remains in its infancy, as the financial services industry is just beginning to explore the blockchain’s potential. To cultivate the industry’s interest in the technology, some banks have launched innovation labs, where startups are attempting to build a blockchain solution that is secure, scalable, efficient and trustworthy.
Future of Finance Competition which includes a series of “immersion workshops” designed to encourage startups to develop their ideas for blockchain or other technologies that can advance global banking.
In the forseen future it will be established that, financial transaction volumes will shift toward the blockchain.