With a great potential to reshape how the financial system works, the blockchain technology had come under great attention. Private banks, central banks, and various blockchain-based startups had already developed innovative solutions and continue to invest in R&D, fully aware of the great potential this new technology brings. As the internet continues to grow, the world had moved away from the paper fiat and now most of the developed and emerging markets are using electronic payment systems. The blockchain, however, can take the financial industry to a whole new level, thanks to some of its potential applications.
Blockchain for Finance
Financial transaction processing is one of the main areas where the blockchain technology is already being used. Companies around the world want to develop various applications like:
• Order-to-cash and procure-to-pay integration
• Self-validating sub-ledgers for receivables and payables
• Intercompany accounting and consolidations
• Working capital and cash-cycle improvements
• Capital planning and performance management.
These blockchain for finance solutions are already underway, with some of them already in use. Since they can reduce bureaucracy, reduce operating costs, and provide better products/services for the final users, there is no doubt there will be increased interest to invest in blockchain-based solutions.
But the blockchain can be used in the broad economy, as well, for solutions like integrity or authenticity of products, healthcare systems to track deductibles and out-of-pocket expenses around providers, monitor manufacturing, sales, registration, and maintenance of large-ticket assets.
Cryptocurrencies the next step forward?
Cryptocurrencies are what put the blockchain in the spotlight, though. The appearance of Bitcoin and altcoins like Ether, Litecoin, and Dash, had opened a different new world for digital money. The crypto industry had grown exponentially and in 2020 we have cryptocurrency CFD trading, futures, and options based on cryptocurrencies, alongside the conventional crypto market.
With cryptocurrencies, new payment systems had emerged, helping people to have an alternative for the traditional centralized monetary system. Increased intervention via fiscal and monetary policy had raised concerns about the true value of fiat currencies and there are growing worries a reshape of the global monetary system will be required in the not-too-distant future.
However, in their current shape, traditional cryptocurrencies cannot replace fiat money. But with blockchain, people can develop or improve the current digital money, to come out with an optimal solution.
A fully digitalized economy
Based on the trajectory of global finances, it is increasingly clear the world is moving towards a fully decentralized economy. Even though at present there are a handful of companies holding a monopoly in the tech and financial sector, the blockchain is a truly disruptive technology that can change the current natural order of things. Although most economists and analysts expect the process to take years or decades, it had already begun and is irreversible. Everything that matters is if the world will manage to build and implement a blockchain-based system able to make people's lives better. There’s enough upside potential in this field and the only big question is whether it will be valued in full.
Image: source
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Disclaimer: This is a guest post by Debbie Wilson. Article on this page is author's work and has not been created, verified or edited by EtherWorld.co. The liability for the same solely rest with them. The information contained in this web page does not constitute financial advice or a solicitation to buy or sell any cryptocurrency contract or securities of any type. Trading is a high risk activity. You're suggested to conduct your own research, and verify the content before relying on them. Readers are suggested to fully understand all risks associated with any kind of investing they choose to do.
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