Blockchain technology has innovated many fields. The nascent technology has been successful in displaying its potential to many. Up till now, its most common use cases include supply chains, decentralized applications, digital assets and many more. Although blockchain has caught the eyes of many, it still has a long way to go. Like many other sectors, blockchain is often linked with the banking sector as well. The decentralized and secured architecture has capabilities to succor the needs of many fields so its impact on banking is worthwhile to be explored.
To get insights into blockchain’s current performance and expected future in the banking system, BlockPublisher reached to Alexey Ermakov, CEO and founder Aximetria, a mobile wallet and payment card for traditional and cryptocurrencies. Alexey, who is also the founder and CEO of Pay reverse, is a blockchain and cybersecurity expert. He responded to several inquiries related to blockchain and banking sector.
- What’s the state of the blockchain in the banking industry today?
Alexey Ermakov: “Blockchain as a technology still has not gained significant distribution in the banking industry. In none of the existing banking processes, blockchain technology has gained recognition or made it impossible to make these processes more efficient, faster or safer. However, all participants in the banking sector are optimistic about the future options for reconciling this technology and actively continue to pilot/experiment it in a wide variety of applications. At the same time, in the scientific community and among developers, the focus is on increasing the performance of the blockchain technology, increasing the adaptation of the blockchain to the main technological processes and systems.”
Alexey Ermakov: “Despite the pessimism associated with the fall in the value of crypto-assets, many banks at the end of 2018 demonstrated intentions to launch certain products associated with the use of blockchains and cryptocurrencies. That was fully confirmed, since the beginning of 2019, many banks announced the launch of custodial services – a good product that will simultaneously support the desire of these banks to develop in an innovative way and provide corporate clients with a way to get acquainted with a new type of crypto assets, on the other hand, to keep the banking paradigm service and service, when the bank remains an intermediary in the management of the crypto-active assets of its clients, and the client does not have actual access to the crypto assets. Crypto custodial services integrated into a banking showcase, this will be the main trend for banks in 2019.”
What’s the # 1 challenge to blockchain adoption in banking?
Alexey Ermakov: “By far the most striking and promising direction of adaptation of the blockchain and cryptocurrency to widespread are stablecoins, inherently representing ordinary money, but retaining all the advantages of cryptocurrencies. This unique combination of “all is well” and stability of the course makes them the most promising asset and technology for use as in Banking and other directions.”
What’s the # 1 benefit blockchain brings to banking?
Alexey Ermakov: “Today, the blockchain primarily allows banks to change. It’s too early to speak about quantitative or qualitative changes or benefits, but the availability of such technology itself, its availability to all market participants, arising due to competition, will change banking products for the better.”
What’s the future of blockchain in banking?
Alexey Ermakov: “Obviously, the blockchain will change the bank, to replace digital banks, focused on one or two product niches and make them effective, universal digital banking platforms will come that will offer the entire range of banking products, not only for B2C-, as we see it today, but also the whole variety of B2B products. The blockchain will open up opportunities for a large-scale launch of the sharing-economy services, which will replace the traditional and digital banking. The first signal to the fact that the world can do without traditional banking will be the moment when financial or credit companies will emerge, providing the entire set of services that have a high level of trust and do not have a single settlement account in traditional banks.”
Cryptocurrencies, one of the use cases of the blockchain, have already attracted the attention of the majority. The insights provided by Alexey adds that the role and potential of blockchains, in addition to offerings of cryptocurrencies, can serve greatly for the banking sector in the future.