Cryptocurrencies have proved to be the major generator of wealth for many investors. During the BTC Mining. Different industries are benefiting from this new technology, and the banking sector is one of the industries that has been revolutionized because of that went off cryptocurrencies and blockchain technology. Banks have always been against cryptocurrencies and their adoption. However, the recent turn of events in favor of the Crypto industry has compelled the banking sector to change its stance and embrace cryptocurrencies. Let us dive into this topic and understand how banks are drawn to the new possibilities brought into the picture because of the Ethereum blockchain.
Smart contract technology, a boon for the banking sector
Even though the value of Bitcoins is more than Ethereum, the value of the Ethereum Blockchain has grown much more than the Bitcoin Blockchain. The interest shown by financial service groups is based on the underlying platform, which is the Ethereum Blockchain, and not the ETH tokens. Smart Contracts, which serves as one of the key use cases for the Blockchain, has interested Banks, as it allows the automation of various repetitive processes. Smart contracts refer to programs existing on the Blockchain, which get activated when pre-defined conditions are met. This allows two different parties involved in a transaction to achieve immediate results upon the execution. The security measures provided by the Ethereum Blockchain also allow Financial groups to trust it with the execution of large-scale transactions in the form of bonds. Thus, it can be stated that the Banking sector has identified the potential of the Ethereum Blockchain with the introduction of technologies, such as Smart Contracts.
A network available to the public throughout the globe
ConsenSys, an American company, has developed an infrastructure based on the Ethereum Blockchain. This infrastructure is open-source and allows developers to access the Ethereum Blockchain to develop platforms that benefit humanity. ConsenSys has received funding from Financial Groups like JPMorgan and Mastercard. The Ethereum Blockchain can provide people with services related to saving, investing, and making payments. This would render the Industry that deals with Financial Services useless.
Better coordination between different banks
Banks have been operating upon different blockchains until now, limiting the ease of carrying out processes between different banks. Once integrated into a single blockchain, Banks will access interoperability to a greater extent. This, in turn, allows different banks to carry out transactions faster and more conveniently. The Financial Industries are evolving at a rapid pace, and it must adapt technologies that can make its function faster. Blockchain technology has been identified as one of the leading options to make this possible. Upon successful implementation of Blockchain in the Financial Services industry, cross-border transactions can be carried out faster. The security measures further enhance the trust put in the relatively new technology, as Blockchain allows companies to store valid customer information.
The Blockchain can create new ways of carrying out processes.
It has been observed that the Ethereum Blockchain Technology has allowed many industries to devise new ways of carrying out processes over the Blockchain, which has enhanced their functioning. The Banking sector has had the same experience as other industries, as it witnesses and anticipates new and innovative ways of carrying out processes in the Banking Industry. To demonstrate this, one can imagine how the Blockchain can help banks access new customer bases by creating credit profiles in a better and faster way.
Blockchain Technology is revolutionizing different industries, and the Financial Services Industry, or the Banking Industry, has identified the potential of such a technology. This has led to many investments in blockchain technology from Banking and other Financial service providers during the Bitcoin era. One of the major applications of the Ethereum Blockchain, the Banking industry is drawn to Blockchain Technology, is the Smart Contract technology. In addition to Smart Contracts, other use cases can allow the Banking industry to enhance its processes. This will allow them to save a lot of time and resources. Thus, one can state that Banks are drawn to the Ethereum Blockchain owing to the possibilities it brings and the already existing platforms it houses.
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