Kaip „Blockchain“ technologija yra pažangiausia verslo finansavimo riba? – Kriptopolitas

In the rapidly evolving world of business finance, technology continues to play a transformative role. One such technology making waves in this space is blockchain. Originally created as the underlying technology for Bitcoin, blockchain technology’s potential extends far beyond cryptocurrency. Its decentralized, transparent, and immutable nature has presented compelling use cases for businesses, particularly in the financial realm. 

Why is Blockchain important in the financial industry?

The evolution of blockchain technology is reaching a stage where financial assets can be managed with greater transparency. 

Once recorded, it is difficult or nearly impossible to hack the blocks in a blockchain. Each block in the chain indicates how many transactions took place, and every time a transaction occurs, it is added to a participant’s ledger. The system uses this feature to resolve problems with trust, while also offering transparency, immutability, and security.

The use of blockchain technology is engrossing since it alters human interaction and provides equal accessibility for everyone. This technology is causing a significant disruption in various industries, but traditional finance will experience the most impact.

The reason for this is that blockchain reduces the reliance on conventional centralized infrastructure. It acts as a means of verification that is not controlled by a single institution. The regulations surrounding blockchain technology haven’t kept up with its rapid development, creating barriers for its implementation in traditional finance.

Is the finance industry ready for technological disruption?

Every day, the global finance industry handles trillions of dollars for billions of users. However, it is plagued by issues such as bureaucracy, high costs, frequent fraud, and constant delays.

Every day, third-party services such as payment networks, stock exchanges, and money transfer services have to deal with criminal activities. As a result, the regulatory costs increase and these costs are ultimately passed on to the end-user.

The paper-based processes that are segregated and centralized are no longer sustainable in the digital age. Hence, the invention of blockchain, the technology used in Bitcoin, creates efficiency where there is none.

Currently, there exist over 16,000 cryptocurrencies with Bitcoin being the largest. The second-largest is Ethereum.

But what was the reason behind big players like Visa, Mastercard, JP Morgan, Ernst and Young, and Deloitte deciding to adopt blockchain technology in their businesses and how did the implementation begin?

Current blockchain technology trends in the finance industry

The world economy has been unstable in the last three years due to the impact of Covid-19, resulting in unemployment and inflation, which in turn has led to a global recession.

Before the emergence of blockchain technology, people would typically invest in gold or real estate as a safe haven during an economic crisis when inflation was at its peak.

Nowadays, even highly optimistic economies are opting for certain types of cryptocurrency. This is not only because they can be utilized during times of political tensions, but also because Chief Financial Officers of companies perceive them as cost-effective and more expedient alternatives.

By using blockchain technology, financial institutions can process transactions faster and expand their customer base worldwide. Studies suggest that by 2024, almost 20% of major businesses will use cryptocurrency for certain transactions. Nevertheless, in a survey of finance executives, 84% expressed doubts and believe that holding Bitcoin carries financial risk.

Managing the incorporation of cryptocurrencies into current financial systems and business models will be a challenge for CFOs. However, as a potential hedge against inflation, decentralized finance (DeFi) and cryptocurrencies may be appealing.

What if the US Government had used cryptocurrencies to revive the pandemic-hit economy during the last two years? However, the Government and Congress chose to inject trillions of dollars into the market as relief and stimulus, while the Federal Reserve increased the currency supply to finance the debt incurred.

According to multiple reports, the US has printed a significantly greater amount of money due to COVID in a short period than they had printed in the last 200 years.

At the beginning of the pandemic, the total amount of stimulus was $5 trillion, which is much larger than the stimulus package created in response to the 2009 recession. The 2009 stimulus package was around $787 billion which equals to $975 billion in 2021 USD value.

Just two days after the Senate passed the stimulus package, Meitu, a Chinese app creator, and Aker ASA, a Norwegian multinational, announced that they had added Bitcoin to their balance sheets. They are joining MicroStrategy and Square, two American companies that have already done the same.

Currently, approximately 90 countries are exploring the integration of Central Bank Digital Currencies (CBDCs) into their financial systems, indicating a growing openness to blockchain and cryptocurrency among governments worldwide.

China launched its ‘digital yuan’ initiative first and allocated over $5 billion worth of it to its citizens by June 2021. Meanwhile, the Indian government is working on developing its own CBDC and trying to determine how to tax cryptocurrencies.

Advantages of blockchain technology in business finance

Blockchain technology has the potential to transform the financial landscape of businesses significantly. Here are some of the key advantages that make it a compelling choice for the world of business finance:

Skaidrumas ir pasitikėjimas: One of the most prominent features of blockchain technology is its transparency. Each transaction is recorded on a public ledger, visible to all participants within the network. This transparency fosters a sense of trust among the stakeholders, as every transaction can be tracked and traced back to its origin. Furthermore, once a transaction is recorded, it becomes immutable, meaning it cannot be altered or deleted, thereby further enhancing the trust quotient.

Padidėjęs saugumas: Security is of paramount importance in business finance, and blockchain delivers it in abundance. The decentralized nature of blockchain, coupled with its encryption and complex mathematical algorithms, make it highly resistant to fraud and cyber-attacks. In addition, the consensus protocol of blockchain requires that all parties agree on the validity of transactions before they are recorded, providing another layer of security.

Efektyvumas ir greitis: Traditional financial processes often involve numerous intermediaries and a substantial amount of paperwork, which can lead to delays and inefficiencies. Blockchain streamlines and automates these processes, thereby enhancing efficiency and speed. It enables peer-to-peer transactions, which can be executed in near-real-time, eliminating the need for intermediaries.

Kainos sumažinimas: Blockchain has the potential to significantly reduce costs in business finance. By eliminating the need for middlemen and automating processes, blockchain reduces operational costs. Furthermore, its transparency and immutability can also reduce costs associated with fraud, disputes, and reconciliations.

Prieiga prie pasaulinių rinkų: Blockchain opens up the potential for businesses to easily and securely participate in global markets. It simplifies cross-border transactions, which can often be complex and time-consuming due to differences in regulations and currency conversions.

Padidintas likvidumas: Blockchain allows for tokenization of assets, where real-world assets can be digitally represented on the blockchain. This could lead to more liquidity in markets as it enables fractional ownership and makes previously illiquid assets more accessible.

Real-Time Auditability: Given that all transactions on a blockchain are time-stamped and cannot be altered, blockchain provides a reliable source of data for audit purposes. This not only simplifies the auditing process but also enhances the credibility of the financial records.

Challenges in Adopting Blockchain in Business Finance

Despite its numerous advantages, the adoption of blockchain technology in business finance is not without challenges. Understanding these hurdles is the first step toward addressing them effectively. Here are some of the key challenges:

Techninis sudėtingumas: Blockchain is a relatively new and complex technology. Understanding how it works and how to implement it requires a level of technical expertise that may not be readily available within many businesses.

Reguliavimo neapibrėžtumas: As a disruptive technology, blockchain poses significant regulatory challenges. The legal framework for blockchain technology is still evolving, and businesses may face uncertainty about how to comply with these regulations.

Mastelis: While blockchain technology is praised for its security and transparency, it can face issues related to scalability. As the number of transactions increases, the speed and performance of the blockchain can become a concern.

Duomenų privatumas: Despite blockchain’s increased security, it raises concerns about data privacy. Since some blockchains record and display all transactions publicly, businesses must find a way to balance transparency with the need to protect sensitive information.

Integracija su esamomis sistemomis: Integrating blockchain technology into existing systems can be a complex and time-consuming process. Businesses will need to adapt their current IT infrastructure to make it compatible with blockchain technology.

Overcoming the Challenges: A Path to Adoption

Overcoming the challenges of blockchain adoption in business finance involves a multi-faceted approach that combines technical innovation, regulatory engagement, and strategic planning. Here’s a possible path to adoption:

Švietimas ir mokymas: To overcome the technical complexity of blockchain, businesses can invest in education and training. This could involve hiring blockchain experts, training existing staff, or partnering with blockchain service providers.

Active Regulatory Engagement: To navigate regulatory uncertainties, businesses can engage proactively with regulators. This can help them understand the regulatory landscape and contribute to shaping it.

Bendradarbiavimas ir partnerystė: Collaborating with other businesses, technology providers, and blockchain consortia can help businesses overcome scalability issues. Such collaboration can lead to the sharing of resources, insights, and best practices, facilitating collective problem-solving.

Private Blockchain Networks: To address data privacy concerns, businesses can consider private or permissioned blockchains. These offer more control over who can access the information and can balance transparency with privacy.

Laipsniškas įgyvendinimas: To ease the process of integration with existing systems, businesses can adopt an incremental approach. This could involve starting with pilot projects, learning from them, and gradually expanding the scope of implementation.

While the path to blockchain adoption in business finance has its hurdles, these challenges are not insurmountable. With strategic planning, continual learning, and collaboration, businesses can harness the power of blockchain and pave the way for a more efficient, transparent, and secure financial future.

Išvada

Blockchain technology, with its plethora of advantages, has the potential to fundamentally transform business finance. By fostering trust, enhancing security, boosting efficiency, reducing costs, and presenting new opportunities, it positions itself as a significant player in the financial landscape of the future. 

While challenges such as technical complexity, regulatory uncertainty, scalability issues, data privacy, and system integration exist, they are not insurmountable. Through education, regulatory engagement, collaboration, privacy-focused approaches, and incremental implementation, businesses can navigate these hurdles. As we move forward, it becomes increasingly clear that embracing blockchain could be the key to a more efficient, transparent, and secure future in business finance.