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The Blockchain technology is proving itself to be the ideal platform for the finance and banking sector. The innovation and experimentation being done in the fintech sector are opening many opportunities that will potentially solve the issues of the current banking structure.
This authenticated shared ledger system is here to revolutionize the banking sector. For the fin-tech sectors, security is paramount therefore it allows banks and individuals to send assets all over the world in a credible, secure and traceable way.
No to Intermediaries
Fintech experts are exploring new ways to completely eradicate the dependence upon intermediaries due to the convenience the cryptography-based structure provides. In the blockchain, there is no requirement for a unified ledger framework — it depends on a decentralized trust model that is not controlled by even a single entity. According to tech gurus, we can expect blockchain syndicated loans soon; in any case, the finance sector should line up with these norms. They should set up governing rules beforehand so that the blockchain innovation can advance into the area.
Another advantage of this much-hyped framework is due to its role in 'voting Management.' Through the blockchain technology, the proxy voting mechanism can maintain the stability of electronic voting with increased security measures.
Shares and Dividends
Cryptocurrency developers are modifying cryptocurrency innovation to accommodate the issuance of dividends and shares.
Blockchain Acts As A Proof Chain
As mentioned above this system is not run by a single entity and a group of users have to verify the transaction thereby increasing the level of trust without any failure. Therefore, if any process asks for identity verification, banks can use individual blocks for identification.
Types of Blockchains
There are numerous types of the blockchain, principally falling into the classification of either private and public. Even though organizations like Ethereum and Ripple could propose to utilize their blockchain, blockchain networks and banks don't prefer to rely upon an organization to exchange their assets.
Therefore, Blockchain and Cryptocurrencies are being considered and adopted by many industries, especially the banking sector and according to a study, 94% of financial professionals believe that cryptocurrency in the banking sector is more likely to offer effective outcomes.
See Also: Financial Services Review