Writer: Farhang Maghdeed
Over the past thirty years, central banks focused on fighting inflation globally and have been failing. Given that inflation has been identified as the major culprit in most of the global depression since the 1920’s to today, no wonder most financial institutions have made it their target trying to control and manage it. However, it was the financial crisis of 2008 that led to deeper questioning of economic processes, credit system and debt management.
The recession pointed out a gap in the public’ trust in financial institutions and Governments due to the lack of transparency and accountability in financial world. The question on everyone’s mind is: will this stop, or it will continue? Are there any solutions out there that can prevent the collapse of financial fundamentals that are built around a centralised system? Not a question with an easy or short answer, but the smart money seems to be on blockchain architecture that is using cutting edge technology to build trust and transparency.
Blockchain platform are attracting the attention of financial service sector to its innovative technology that is set to change the future and it has emerged as a new paradigm in the financial industry. In 2016, the World Economic Forum (WEF) predicted that blockchain will revolutionize financial services, and build a solid platform where consumers and producers / buyers and sellers will converge. The financial sector however, is apprehensive considering the technology’s link to cryptocurrencies and evolving blockchain technology use in other sectors.
In 2017, the banking sector and remittance industry experienced industry disruptions and large-scale mergers. By the end of the year, a consensus between the banking sector and blockchain technologists were reached. In the first quarter of 2018 several banks started adopting and testing the technology in phases. Decentralised Ledger Technology (DLT) has created the “internet of value” by empowering peer to peer, transparent, immediate and almost free exchanges of value over the internet awakening the banking industry the real possibility of their demise and effectively killing the stranglehold they have on the financial markets, not a pretty thought if you are involved in the finance business.
According to Statistics, from 2016 to 2021 it is estimated that blockchain technology is heating the global market aggressively, with the Blockchain industry market reacing 339.5 Million USD in size and is forecast to grow to 2.3 billion USD by 2021. Although banks and financial institutions have always been at the frontline of the technology evolution, it is very interesting to know they are preparing for a true battle. Who will win? Who will emerge triumphant and reap the spoils of war?
It’s really too early to tell yet, but for Blockchain the future is bright.
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