Efficiency, speed, security and lower costs are some of the advantages of blockchain in the financial world compared to traditional technologies.
Banks around the world have shown interest in blockchain technology and are advancing in the use of this technology that has more than 10 years and was first used as the platform base of cryptocurrencies.
Blockchain technology is achieving more spaces in the financial world. In fact, according to a 2018 Bloomberg report, banks and other financial services companies were investing USD 1.7 billion that year to adopt the blockchain technology.
Recently, it was announced that a group of 40 central banks around the world has already expressed interest in blockchain technology. However, most of the central banks believe that blockchain and cryptocurrencies need more regulation.
Banco Santander, in Spain, is one of the financial institutions that is leading the use of blockchain technology in that country and is one of the first banks that showed interest in distributed ledger technology in Europe.
One of the objectives of this bank is to develop an international payment service. For this reason, in 2016 the institution allied with Ripple to initiate a pilot test using blockchain technology.
Two years after starting the tests, in 2018 the institution launched Santander One Pay FX. This is its first cross-border payment service based on blockchain. It is a platform aimed at clients in Spain, the United Kingdom, Brazil, and Poland. The service is based on xCurrent technology and is designed by Ripple as a protocol to connect different payment networks.
After that, the Spanish bank, which has more than 150 years of history, continued advancing in the development of blockchain solutions focused on the remittances sending services.
In 2019, Banco Santander announced it would develop a payment broker to “extend” its services to countries in Latin America.
JP Morgan Chase
Based in the United States, this is one of the countries more known worldwide. JP Morgan has its blockchain platform and a native token. Last year, it was the first bank in the US to launch its cryptocurrency called JPMCoin.
To achieve this, in 2015, the bank created a division dedicated to exploring emerging technologies such as blockchain. Then, the bank launched Quorum, a private blockchain built from the Ethereum base code and designed to make payments faster and safer.
The platform has been a success. More than 300 banks have joined the Quorum platform for the verification of cross-border payments through the Interbank Information Network (IIN); Among them, six Mexican banks.
One of the five biggest banks in the world, HSBC, which has 7,500 offices in more than 80 countries, announced the creation of a blockchain platform with other recognized banks.
In 2018, HSBC processed an estimated three million operations, making 150 thousand payments through the private blockchain network “FX Everywhere”. An amount that represents USD 250 billion. This amount is a small part of all the transactions that the bank performs, but it is also a large instance for blockchain financing.
Additionally, HSBC also launched a shared blockchain financing platform along with 12 other banks, including BNP Paribas. The system is called the eTrade Connect. It aims to optimize the international trade financing platform time, going from 36 hours to 4.
Wells Fargo, BTG Pactual, and Mitsubishi
Wells Fargo & Co., a financial company with operations worldwide, plans to launch an internal settlement service this year that will be based on its blockchain platform and use the “tokenized dollar”.
Besides, a division of the institution invested USD 5 million in Series B of Elliptic, a startup specialized in connecting banks with exchanges.
BTG Pactual, the largest Brazilian investment bank specialized in investment capital and venture capital in Latin America, has also shown interest in blockchain.
Mitsubishi, Japan’s largest bank, also revealed that this year it will launch its payment network backed by blockchain. Also, the Mitsubishi Group consortium issued a local cryptocurrency in par
tnership with the Kintetsu railway company. About 15 tourist establishments will accept the asset in Ise-Shima.
In this way, more and more banks are interested in using blockchain technology to support their operations, to store their information or even issue their cryptocurrency. At the same time, the creation of central bank digital currencies (CBDCs) would help to achieve greater adoption of blockchain technology, so it is a chain of benefits for both sectors.
By María Rodríguez