Day 36 – Revolutionizing Financial Services

Blockchain News: Blockchain Technology has high prospects of bringing significant revolution into the banking and finance markets. These markets are cluttered with too many intermediaries. Blockchain advantages include: decentralization, transparency, security (very pertinent), reliability, reduced cost, reduced room for errors, simplicity, traceability, and immutability among others.

But it’s not just the Crypto World that is excited.

  • IBM is investing heavily in the potential of Blockchain: Bringing new transparency, simplicity and efficiency to every financial transaction.
  • Big Banks, like J.P. Morgan Chase, believe in its prospective impact: Just as the internet upended how we share information, blockchain has the potential to revolutionize how we exchange value, transfer ownership and verify transactions.
  • The World Economic Forum and a community of over 40 central banks, international organizations, academic researchers and financial institutions have created a framework to help central banks evaluate, design and potentially deploy CBDC (central bank digital currency). Download their white paper.

One of the most exciting applications is within the Remittance Industry. A remittance is a transfer of money by a foreign worker to an individual in his or her home country. Overall global monetary transfers from migrant workers and others hit a record-high $714 billion in 2019. The global remittance industry is projected to hit $1 trillion by 2022 and $1.4 trillion by 2025.

Typically up to 70% of the population in the destination country are without access to a bank or financial services, deemed “the unbanked”.  Financial intermediaries, like Western Union, exploit these unbanked poor, charging up to 15% of the transferred funds in fees.  Blockchain technology offers a solution: Transfers are 388x faster and 127x cheaper than through traditional remittance channels.

There are many great projects involving blockchain technology that promise to improve our world. I am particularly fond of the Founder of Litecoin and the Litecoin Foundation, Charlie Lee. In the crypto world rife with scammers and crooks, he’s the real deal, which is one of the reasons I chose to support his foundation.