- Blockchain technology can make payments cheaper and faster than traditional methods.
- Blockchain technology is addressing global scalability and borderless demands.
- Blockchain technology is expected to have a significant impact on the financial industry.
The topic of a global blockchain payment system has been a popular subject of discussion in recent times. While some may view the potential impact negatively, numerous studies have shown that the potential is positive. A recent study by Deloitte found that blockchain technology can make payment transactions up to 80% cheaper and astronomically faster than traditional methods.
Just as the telephone industry has evolved from PSTN lines to copper lines to 4G and 5G, the payments industry is also undergoing a transformation with the adoption of blockchain technology. This technology addresses the scalability and borderless demands of a fast-growing global economy.
Traditionally, the payments system has been plagued by high costs, lack of transparency, slow speeds, and limited accessibility. These issues were caused by the use of middlemen and third parties who acted as facilitators in transactions, but also added extra costs. Furthermore, traditional payment systems were also time-consuming and inconvenient, with international payments taking days to complete and being more prone to holdbacks and fraud.
Blockchain technology offers a solution to these problems by providing lower costs, faster transaction speeds, increased security, and complete transparency. Merchants and retailers, who once relied on middlemen to transfer money, can now enjoy greater improvements in speed and cost, as well as greater accountability and transparency.
As digital payments have proven successful in developed countries, the adoption of blockchain technology is also opening doors for faster cross-border payments and global transfers. This will change the way value is exchanged across borders forever.
A report by Insider Intelligence predicts that by 2023, 2.3% of US internet users, or 5.5 million adults, will use digital currencies and cryptocurrencies to make payments. With major companies such as Visa and MasterCard entering the digital payments space, the impact of blockchain technology on the financial industry is expected to be significant.
Every prominent bank in the world is currently exploring digital payments or experimenting with blockchain technology to remain competitive and relevant. While smaller banks may be held back by unclear regulations or a lack of risk appetite, the adoption of stablecoins and the push for regulatory clarity is expected to open doors for these banks as well.
In conclusion, the potential impact of blockchain technology on the global payments system is positive, and it is inevitable that digital currency technology will play a significant role in the future of global commerce.