Blockchain technology offers countless benefits to its users. You can always find something which will benefit from the technology. Governments, banks, corporations, investors and everyday people are adapting in its numerous uses while it’s still evolving.
Banks for instance, have always suffered from the centralized credibility system. Most transactions, especially international ones are extremely slow and very expensive. Banking systems are not always stable and are very inflexible.
We can also add the numerous sets of rules, different jurisdictions, restrictions and laws which further slow and annoy bank clients and staff. The market is evolving and there’s an ever growing need for innovative financial products. Banks are already looking towards blockchain technology to address the many issues in their outdated systems.
(ICBC) The Industrial and Commercial Bank of China is planning to implement blockchain technology for exchanging financial assets. ICBS is a state owned bank and is by total assets, is the largest in the world. It became so by taking over Wells Fargo in the beginning of 2017.
ICBC welcomes innovative technology
The patent application, filed back in January 2018 only became revealed last week. ICBC listed the slow and costly system as the cause of exploration of blockchain. Especially, when it came to international and interbank transactions, the system failed to provide the modern approach other banks and clients required.
The platform aims to have participating institutions function as nodes, forming a distributed network. Smart contacts must be used when a transaction request is initiated. Every node will have to validate the transaction with the provided information. A complete transaction will only be accepted if the network has received enough validations from participating nodes for consensus above a predetermined threshold. This will be very beneficial towards eliminating intermediaries and improving the liquidity of the financial assets.
This is not the first time ICBC is looking to blockchain technology to innovate. The bank is also planning on using a decentralized system, which will verify user information via a disturbed network.
There are many risks to consider when a system change of this magnitude will take place. Especially when we are talking about modernizing a system, which operates in the largest asset bank in the world. It’s without a doubt however, that an update is not only necessary but long overdue.
Many institutions in the world should look towards blockchain technology for innovation and a much needed update on their systems.
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