Several companies are currently investing in blockchain technology. Firms all over the world know that blockchain has an incredible potential to revolutionize several industries, including the financial world. And this is in line with what the Bank of Spain thinks about it.
Bank of Spain Recognizes Blockchain’s Potential
A Bank of Spain’s representative believes that blockchain is able to revolutionize the financial world. However, he mentions that banks and financial institutions need to continue investing and researching on the matter.
José Luis Romero Ugarte, member of the General Directorate of Operations, Markets and Payment Systems at the Bank of Spain, said that the financial sector could improve by introducing this technology. In an article, he explains how the technology works and how it is possible to make financial transactions more transparent and efficient.
Transnational payments could be improved by embracing this technology. It provides transparency, reduces transaction times and costs. One of the companies and banks that is already using this technology is Santander.
Although he believes that there are several positive points in the technology, he makes some critics to decentralized systems. Ugarte considers that this technology is not yet tested and that it needs time to be improved. Another important point he marked is that distributed ledger technology (DLT) consumes important amounts of energy to operate.
Furthermore, he explains that a regulatory framework should be created around blockchain technology.
He commented on the matter:
“Although in some models every single node has a copy of the complete registry and visibility over every single transaction, when applied to the financial sector, according to the interests of the participants, access to information could be restricted.”
Additionally, Ugarte says that institutions should always follow the latest innovations and how they can improve the financial market. There are some financial companies that have already talked about how they could be affected by the emergence of new technologies and financial startups.
Back in May, the Governor of the Bank of Spain mentioned that cryptocurrencies have more risks than benefits. However, he seemed enthusiastic about possible applications related to blockchain technology.
Spain is trying to improve the crypto ecosystem by regulating the market. It is imposing flexible regulations and asking the European Union to address virtual currencies in a regional way.
At CoinStaker we have written several times about how Spain and other countries are working with this revolutionary technology. In the future, more banks and financial institutions could start implementing it to improve their services and products.
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