Blockchain for Business:
Applications of blockchain technology for the benefit of businesses
CEO took a first look at blockchain technology in its interview with Dario Scarcella, founder of Capexmove.
In this article we will dig a bit deeper into some of the other possible applications that blockchain can have in business, and implications for business owners.
As defined by most tech sources - blockchain is a distributed, encrypted, open-source, and peer-to-peer database. In a nutshell, information is encrypted and distributed between millions of machines, making it virtually impossible to hack. The data is open-source and shared through a peer-to-peer network, allowing each and every user to verify records and make new transactions, without needing a central regulator.
In the business world, blockchain is currently being used to tackle problems in the realm of financial services. Staying away from crypto currencies, CEO has spotted an area where blockchain can facilitate and reduce costs of a businesses' operations, that of carrying out payments and foreign exchange (FX) transactions.
For businesses that run operations with multiple currencies or need international payments, blockchain can be a blessing. In fact, it could reduce their risk in FX transactions and settle international payments in an instantaneous, secure and virtually un-hackable system.
There are several Startups looking to launch new services for businesses using blockchain, but established players are also exploring new solutions for their clients.
One example is the Spanish banking giant Santander, which launched an FX cross-border payment system, last April. While the service is available only for customers in Brazil, Poland, Spain, and UK for now, the bank is planning to launch it in more markets later during the year.
Eventually, it will become a stand-alone service offered to customers of other banks. Until now the transfers have not been instantaneous (operations settle intraday). However, Santander is planning to introduce this feature this Summer 2018.
Last May, German bank Commerzbank and steel producer Thyssenkrupp used blockchain technology to trade a EUR/PLN €500,000 FX forward option technology in a pilot experiment. While the service is not available to the public, Commerzbank is keen in developing the technology.
Blockchain will "significantly reduce operational risks in foreign exchange transactions", according to the company’s website.
Benefits of blockchain are not only limited to payments or FX payments, however. The technology will bring considerable change also in sectors such as compliance and lending. For example, last April, Spanish Bank BBVA became the first global bank to issue a loan on a blockchain. According to bank reports, a loan of € 75 Million was issued using a distributed ledger, reducing the processing time from “days to hours”.
The services and experiments reported so far represent only the beginning of blockchain-based products offered to the general public by established financial services providers.
The big players are now catching up with all the startups that have been working with blockchain for years, increasing the adoption rate at levels not seen before. We think that it won't be long before this technology will be implemented seamlessly in service which businesses use every day.