建行区块链贸易金融平台,建行区块链业务是什么

❶ China Construction Bank issued blockchain bonds on Ethereum, do you understand it?

If you don’t understand, I will give you an excerpt of the information. Share: China Construction Bank (CCB), one of China’s “Big Four” financial institutions, plans to raise up to $3 billion by selling bonds that individuals and institutions can trade using Bitcoin and U.S. dollars.

SCMP reported that China Construction Bank will sell US$3 billion worth of debt through Bitcoin, which will be traded on Bursa Malaysia.

Over the past few months, as global certainty and inflation loomed, seasoned investors and tech entrepreneurs such as hedge fund managers Paul Tudor Jones and MicroStrategy CEO Michael Saylor has shown growing interest in the Bitcoin space.

Bank of China’s Bitcoin Game

China Construction Bank, also known for being the world’s second-largest bank, is selling a cheap digital bond that buyers can invest up to $100. The security rolls over every three months and pays annualized interest on Libor plus 50 basis points.

For legal purposes, the bonds will be issued and arranged through the CCB branch in Labuan, Malaysia. The town has become a tax haven for Southeast Asian businesses due to its favorable regulations and policies.

The digital bond will be listed on the Fuso Exchange, which will also facilitate trading of cryptocurrencies. It also accepts Bitcoin as payment for all purchases, then instantly converts it to USD.

Zhang Chongzhong, CEO of Fuso Group, noted:

“Bonds are essentially like three-month time deposit products, paying holders much higher fees than most U.S. dollar Bank Deposit Rates. These securities may be purchased by investors around the world, except tax residents of the United States and China and people and entities of Iran and North Korea.

Chief Operating and Financial Strategist, China Construction Bank Malaysia Branch Steven Wong added that the company was not breaking any laws by accepting Bitcoin payments. He said: “We are accepting bank deposits, which is our core business. "

Wong added that the bank considered the bond issuance both a pilot project and an innovative issuance. However, he also cautioned against rumors. "The bank does not engage in Bitcoin or cryptocurrency transactions," Wong said. ”

Haven’t heard of it? Of course I don’t understand. Is Ethereum about to take off?

Does China Construction Bank have a blockchain patent?

Not only is China Construction Bank preparing to issue bonds in Ethereum, it has also previously talked about issuing bonds in Bitcoin. This shows that those who sell things don’t care.What channels should be used to sell?

I believe that China Construction Bank is not the first bank, nor will it be the last bank to issue bonds in the virtual currency market.

Among them, there are several points that can be interpreted:

1. Why does China Construction Bank choose to issue blockchain bonds in Bitcoin and Ethereum? Woolen cloth?

The reason is simple. There are more people playing these two varieties of Bitcoin blockchain. Issuing bonds in these two currencies can obtain the target groups of these two currencies.

This is like: you take a basket of eggs to sell. There are already many egg sellers in the town. In order to sell your eggs, you go to the countryside and find a place with many people to sell them.

Its purpose is very simple, just to sell eggs. It has nothing to do with the village, the focus is on the eggs.

In the same way, China Construction Bank issued bonds on Bitcoin and Ethereum just to sell the bonds.

2. Why doesn’t CCB issue bonds in other currencies?

There are very few people playing other currencies. CCB is also worried that if it sells bonds in other currencies, it will most likely return to zero. Therefore, in order to eliminate risks, if you choose to issue bonds on the Bitcoin Ethereum of players, you will not worry about no one buying it, let alone the risk of zeroing out.

Summary: CCB’s issuance of blockchain bonds on Bitcoin and Ethereum is just a normal bond sale and has little to do with Bitcoin and Ethereum. , let alone that many virtual currencies are legal.

❷ CTFU platform application was put into production to see how blockchain can promote the development of the banking industry

On August 28, the China Banking Association organized the "China Trade Symposium on the construction of "Financial Inter-bank Transaction Blockchain Platform" (referred to as "CTFU Platform"). At the meeting, the China Banking Association, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, the China Construction Bank, and the Bank of Communications jointly signed the "CTFU Platform Service Agreement", officially kicking off the launch of the CTFU platform application.

As a new technology in the financial field, blockchain has continuously expanded its application scenarios and has had a profound impact on the entire banking industry. Various banks have also increased their emphasis on blockchain technology and utilized regional Blockchain technology solves current industry pain points.

What are the pain points in the banking industry?

[if !supportLists]1, [endif] Audit and verification costs are high. Currently, many bank operations require offline operations, and banking business relies on paper documents. A large amount of paper materials are required during the review and verification process, which consumes a lot of manpower and material resources.

[if !supplortLists]2,[endif]Risk monitoring is difficult. Bank trade involves a wide range of transactions, with long transaction chains and multiple settlement methods. Sometimes regulatory data is not updated in a timely manner, which will bring potential business risks to banks.

[if !supportLists]3, [endif] Information sharing is difficult. Each department in the transaction chain is relatively independent. Each department has its own system, standards and management model. Information transparency is low, which makes it difficult to share information between departments.

[if !supportLists]4, [endif] Financing costs are high. In order to reduce their own risks, banks require financing deposits and provide mortgages, pledges, guarantees, etc., which further increases the financing costs of enterprises.

How does blockchain solve these pain points?

Taking CTFU as an example, when Tian Guoli, president of the China Banking Association and chairman of China Construction Bank, introduced the CTUF platform, he pointed out that the platform will play four roles:

1. Realize the standardization, electronicization and intelligence of inter-bank trade financial product transaction information and promote the development of supply chain finance.

Use blockchain technology to put transaction information on the chain, unify standards among banks, and then digitize various paper materials to reduce labor and material costs while ensuring transactions The credibility of information promotes the development of supply chain finance.

2. Improve trade financing efficiency, reduce financing costs, and enhance the quality and efficiency of financial services to the real economy.

In the blockchain, information will become more transparent, and communication between various departments within the bank will become more convenient and faster, improving the collaboration efficiency of all parties in the financing process. Processes are optimized and financing costs are reduced.

3. Use the characteristics of blockchain technology such as "distributed storage, transaction traceability, and non-tampering" to effectively prevent and control trade finance business risks.

Utilizing the non-tamperable characteristics of the blockchain, combined with digital signatures and transaction traceability, we can effectively achieve information credibility, effectively solve the bank's trust cost and audit verification cost, and facilitate the bank's trade finance industry Carry out risk management and control.

4. It is conducive to resource sharing and utilization and improves the association's service level to members.

With the help of blockchain technology, banks can share and utilize resources and information through end-to-end data exchange and effective verification.

Currently, trade finance and supply chain finance are the most feasible application scenarios of blockchain in traditional finance. But the possibilities brought by blockchain technology are certainly not limited to this. Banks will increasingly explore blockchain technology, and areasThe exploration and application of blockchain technology in the field of trade finance is worth looking forward to.

Follow the Bione Finance official account to learn more about blockchain information!

❸ "World Economic Research" Bank financial services are integrated into the cross-border e-commerce ecosystem

Data from the General Administration of Customs show that in the first three quarters, my country’s imports and exports through the customs cross-border e-commerce management platform were 1873.9 billion, a year-on-year increase of 52.8%. At present, China is building a new development pattern in which domestic and international dual cycles promote each other. Cross-border e-commerce has become a new driving force for the transformation and upgrading of foreign trade and a new channel for innovative development. On November 15, 2020, the formal signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) also provided a new development opportunity for cross-border e-commerce. The signing of the agreement represents the official conclusion of the world's largest free trade agreement. Tariffs are expected will drop significantly, and cross-border e-commerce will develop more rapidly.

As the scale of cross-border e-commerce business continues to grow, a large number of cross-border e-commerce platforms have emerged in China, among which the most influential ones include Alibaba International Station, JD Global Shopping, Amazon, and Global Express. Express, ebay, etc. The rapid development of e-commerce platforms has enabled commercial banks to see opportunities, and they have taken advantage of their payment and settlement advantages to actively enter the field of cross-border e-commerce.

[Background Introduction]: As the world’s first national expo with the theme of import, the China International Import Expo is becoming an important platform to help my country build a domestic cycle as the main body and domestic and international dual cycles to promote each other. . On November 4, 2020, the third CIIE opened in Shanghai. As the “investment partner” of the CIIE, ICBC combined its experience in serving the first and second CIIE and relied on its comprehensive global network. , leading financial technology, and a strong customer base, actively assist in global investment promotion, build a financial bridge to interconnect global trade in the post-epidemic period, and provide strong support for forming a strong domestic market, building a new development pattern, and achieving high-quality development.

[Case Introduction]: In order to further enhance its online service capabilities for CIIE exhibitors, ICBC gave full play to its online business advantages and worked hard to build the ICBC Global e-commerce cross-border trade platform. E-Trade Service (GETS) provides one-stop cross-border services for major international exhibitions including the China International Import Expo, free trade zones, free trade ports, cross-border e-commerce comprehensive pilot zones and global trading partners. Business and financial services.

[Product advantages]: ICBC e-purchase cross-border trade platform mainly has four major characteristics:

First, it has richer functions. The platform supports corporate yellow pages, procurement sourcing, product release, online transactions, cross-border payments, logistics customs clearance, financial services and other functions, and can provide various online services in foreign trade scenarios.

Second, the business opportunities are broader. Relying on ICBC’s nearly 16,000 domestic outlets and 426 institutions and participating institutions in 49 countries and regions around the world,The South African Standard Bank Group has the global layout advantage of indirectly covering 20 countries in Africa. The platform can help foreign trade companies find partners around the world and expand business opportunities extensively.

Third, transactions are safer. The platform adopts real-name authentication for online transactions, strictly reviews customer information, and tracks order status in real time. It also provides bank-level security protection measures to ensure the safety of users' online transactions.

Fourth, payment is more efficient. With the help of ICBC's global payment and clearing network, the platform enables cross-border payments to be fully online and payment status is displayed in real time. The platform provides global 24-hour uninterrupted RMB clearing services and supports cross-border payment services in more than 20 currencies.

From the above review, we found that currently, commercial banks mainly provide services such as online cross-border payment, currency exchange, cross-border settlement, trade financing, transaction guarantee, and income and expenditure declaration for cross-border transactions.

The way banks participate in cross-border e-commerce platform business is mainly represented by the following three models:

The first is the support model. Commercial banks support third-party payment institutions, such as Bank of China's "BOC Cross-border e-Commerce", which provides anti-money laundering, foreign exchange settlement and sales, declaration, cross-border remittance and clearing and other financial services for cross-border e-commerce business scenarios of third-party payment institutions.

The second is the cooperation model. Commercial banks cooperate directly with cross-border e-commerce platforms, such as Shanghai Pudong Development Bank’s “cross-border e-commerce collection” business, which cooperates with the Amazon platform; China CITIC Bank’s “domestic cross-border e-commerce general trade all-online export foreign exchange collection system”, Cooperate with Aliyidatong Company.

The third is the self-operated model. Commercial banks operate self-operated cross-border e-commerce platforms, such as the ICBC e-purchase cross-border trade platform in the case. Compared with traditional e-commerce platforms, banks' self-operated cross-border e-commerce platforms have irreplaceable advantages in terms of cross-border payment settlement, policy support, and credibility. As for the ICBC "Integrated e-Shopping Cross-border Trade Platform" in the case, its natural advantages are its extensive global network and rich overseas customer resources.

As the current volume of cross-border e-commerce transactions increases and the number of participants increases, the demand for financial services in the entire industry will inevitably become diversified and comprehensive. Commercial banks urgently need to explore service upgrades, accelerate innovation and transformation, and cater to the new trade pattern as cross-border e-commerce platforms develop rapidly.

Blockchain is a decentralized database. Blockchain has the advantages of security and efficiency, which helps banks serve cross-border e-commerce platforms and share resources. Banks can use blockchain technology to ensure the security of the payment environment, strengthen transaction trust, and reduce management costs. The first is to accelerate the deployment of blockchain technology upgrades and applications, and carry out the bank's own institutional reform and departmental system reform. Second, banks combine their own strengths in trade financial services to apply blockchain. For example, banks with settlement advantages can strengthen the application of blockchain in acceptance and message sending.

Since cross-border e-commerce has the nature of international trade, it isWhen providing overseas e-commerce financial services to support business, we must not only consider Internet security risks, but also consider the chain reaction of market risks in international trade, including the foreign trade economic environment, exchange rate risks, etc., on the operations of small and medium-sized enterprises on the platform. At present, affected by the rebound of the epidemic and the renewed turbulence of Brexit, industry risks are gradually increasing, and the probability of default risks is increasing. Therefore, when commercial banks provide financial service support to cross-border e-commerce, they must first conduct data analysis and background investigations to control risks within a controllable range.

To cultivate financial service talents that adapt to the development of cross-border e-commerce business, we can start from three aspects: First, banks directly recruit comprehensive talents trained by universities; second, banks train and rotate existing employees. The third is to strengthen communication and interaction between banks and cross-border e-commerce platforms.

❹ What are the prospects of blockchain finance?

1. In fact, the combination of blockchain technology and finance is not accidental. Simply put, blockchain is a distributed shared ledger and database, which has the characteristics of decentralization, non-tampering, full traceability, and traceability. Finance is cooperation based on trust, and these characteristics of blockchain lay the foundation for creating trust. Blockchain technology is of great significance in solving problems in the financial field such as high credit risk, low efficiency of capital use, and high payment processing costs.

2. From a practical perspective, Bitcoin is not equal to blockchain. Digital currency is only one of the applications of blockchain technology in the financial field. In the fields of supply chain finance, payment and clearing, trade finance, financial transactions and other fields, "blockchain +" has rich application scenarios and imagination space.

3. Industry insiders pointed out that although blockchain technology has The application prospects are broad, but there are currently only a few projects that have actually been implemented in Suisui and have produced social benefits. Blockchain technology is in the early stages of development and still needs to be viewed rationally. The next step is to use blockchain technology to explore digital economic model innovation. Add impetus to the optimization of the business environment and provide support for promoting high-quality economic development.

❺ How does trade finance catch up with the trend of financial technology?

In recent years It has become a well-known fact that the technological wave has changed the financial industry. The application and research of technologies such as big data, cloud computing, blockchain, and artificial intelligence in the financial field have become hot spots, further giving birth to the term Financial Technology. A brand-new concept. Financial technology covers a wider range of areas than Internet finance. Based on Internet technology, it uses more cutting-edge information technologies such as big data, cloud computing, Internet of Things, blockchain, and artificial intelligence, striving to improve financial services through technological breakthroughs. Efficiency, thereby creating new value, the main business areas include payment settlement, fund raising, treasury management and technical services.

Since 2017, the trend of financial technology has become more eye-catching. On the one hand, the People's Bank of China The Fintech Committee was formally established to clarify the status of Fintech and its role inIt plays an important role in driving financial innovation and better serving the real economy; on the other hand, the five major banks of Industry, Agriculture, Bank of China, China Construction Bank, and Communications Bank have reached cooperation with the five major Internet companies of Internet, Alibaba, Tencent, JD.com, and Suning respectively, showing that banks The industry pays full attention to and quickly follows up on the financial technology field.

Relevant experts said that new technologies such as big data, artificial intelligence, and blockchain are becoming increasingly mature and are beginning to be applied in the field of financial services to try to solve the security and trust issues between finance and the real economy. This means that driven by financial technology, a new era is coming in which finance and the real economy will integrate and develop together, and service capabilities and levels will reach a new level.

1. Fintech is forcing banks to change their thinking model: As a basic business of commercial banks, trade finance business undertakes a comprehensive business integrating payment, settlement, deposits, loans, financing, credit guarantees, etc. The service connotation highlights its importance in bank operations with the advantages of strong debt-driven, high-yield output, and low resource consumption. In addition to reducing duplication of work, improving the accuracy of verification, and the convenience of interaction, financial technology can also use comprehensive analysis and application of structured and unstructured data to mine information, relationships, and trends that were previously difficult to detect, and improve data Explore new business opportunities and improve risk prevention and control capabilities based on acquisition, analysis and application capabilities. Therefore, trade finance business also needs to follow the trend, change the model, and use financial technology to improve trade finance service capabilities.

With the development of network technology, banks have accumulated a certain amount of technology in the field of trade finance. For example, when a bank opens a letter of credit, using currently relatively mature digital technologies such as OCR (Optical Character Recognition) and ICR (Intelligent Character Recognition), the application data can be directly extracted and converted into a letter of credit, replacing tedious manual entry. In March 2017, China Everbright Bank's cross-border e-commerce payment system was officially launched. This system is designed according to the one-stop needs of cross-border e-commerce. It integrates foreign exchange sales, collection and payment, and third-party payment institutions can successfully complete online transactions. It provides diversified operations such as foreign exchange settlement and sale, foreign exchange collection and payment, and provides full-process cross-border payment financial services for cross-border e-commerce payment transactions. The launch of Everbright Bank's cross-border e-commerce payment system has opened up channels for domestic and overseas capital transactions among third-party payment institutions and improved the bank's cross-border financial service system.

2. The banking industry is actively testing the "blockchain + trade finance business": (1) Domestic letters of credit. In July 2017, Minsheng Bank and China CITIC Bank pioneered the domestic credit based on blockchain Certificate Information Transmission System (BCLC) (Phase I). This is the first time that the domestic banking industry has applied blockchain technology to the field of letter of credit settlement. It not only shortens the original delivery time of paper letters of credit between banks, but also makes all aspects of the letter of credit more transparent and traceable, avoiding errors and fraud. In September 2017, Suning Bank successfully accessed BCLC. In April 2018, Minsheng Bank Ningbo Branch successfully processed the first blockchain domestic letter of credit through BCLC.The successful trial of the first blockchain domestic letter of credit has not only effectively improved the efficiency of issuance, improved customer experience, but also broadened trade finance channels. (2) Forfeiting transaction. In November 2017, China Construction Bank completed the first blockchain forfeiting transaction (Forfeiting, a form of financial financing that includes buying notes or buying out notes), with an amount of nearly 100 million yuan. This is another major breakthrough innovation of China Construction Bank in the field of "blockchain + trade finance" after realizing the application of blockchain technology in the field of domestic letters of credit. Hangzhou United Bank joined the "China Trade Finance Blockchain Alliance" established and initiated by China Construction Bank in September 2017, actively supporting the development of blockchain trade finance. In January 2018, Hangzhou United Bank cooperated with China Construction Bank Zhejiang Branch to complete the country’s first inter-bank blockchain forfaiting transaction. With the help of the trade finance blockchain, the Forfaiting buying bank and selling bank are connected, and through functions such as online matching of transaction inquiry and quotation, online operation of processes, etc., the electronic transaction documents and the visualization of the transaction process are realized, effectively improving the timeliness. , security, and convenience, demonstrating the integration role of blockchain in financial technology, and breaking through the cross-system limitations of blockchain technology. (3) International factoring. In January 2018, China Construction Bank completed its first international factoring blockchain transaction, becoming the first domestic bank to apply blockchain technology to international factoring business and the first implementation in the industry. It has established a “factoring blockchain ecosystem (FablockEco)” that is directly participated by customers, factoring commercial banks and other parties. The application in the factoring field pioneered the simultaneous inclusion of both parties in basic trade into the blockchain, and realized the automatic identification and transfer of qualified accounts receivable through smart contract technology, making the entire transaction visible, traceable, and effective. It solves the operational problems such as cumbersome message transmission and complex rights confirmation process faced in the current development of factoring business, and is of great and positive significance for preventing fraud risks in traditional trade financing and improving customer experience.

3. Improving data capabilities has become the core competitiveness of developing trade finance: Technology is not omnipotent. Due to the inherent complexity of financial risks, financial risks will not disappear due to technological development. And with the rapid entry of non-bank institutions such as Internet giants, financial technology companies, and industry leaders, a new competitive landscape will be created. In addition, it is difficult to predict the risk generation methods, changes in conduction paths, and acceleration of conduction speed that may be caused by the adoption of new technologies. In such a competitive situation, banks must make full use of their own informatization foundation and take advantage of the favorable conditions that corporate customers have already carried out a large number of digital financial management, as well as the integrated data management of procurement, production, sales and finance, to comprehensively promote the development of trade financial services. Digitization. Establish high-quality databases with the help of financial technology, strengthen basic capabilities of stable and precise data analysis, and provide long-process, multi-scenario applications in trade finance services to provide data for accurate forecasting, accurate marketing, accurate innovation, and accurate pricing. support.

❻ Why banks love blockchain so much

Banks are competing for blockchain and many problems need to be solved

As traditional financial institutions, banks are the most active pathfinders in the field of blockchain. In recent years, many domestic and foreign banks have applied blockchain technology to credit, clearing and other fields. The unique trust mechanism of blockchain is regarded by banks as a key technological breakthrough for innovative risk management and simplified transaction processes. However, as an emerging technology, the blockchain ecosystem is still in the process of being established, its applications are very limited, and many problems still need to be gradually solved during development.

“At present, the blockchain cannot run high-frequency and concurrent transactions, and the network speed and computing power cannot support it. For example, in the payment field, if it is online shopping, it can still be achieved; if It’s high-frequency trading in futures, so it can’t be done,” Huang Zhen said.

Jiang Peng said that at the beginning of designing the blockchain system, CITIC Bank carefully demonstrated the business links suitable for using blockchain.

“From global experience, it is not suitable to use blockchain to build large and complex systems. Don’t try to use blockchain to solve all problems, but focus on solving core problems. Do too much Complex systems are time-consuming, and technology develops so fast that before the old system is completed, it will face iterations of new technologies," Jiang Peng said.

The idea of ​​"only solving core problems" ensures that after the blockchain is launched, the relevant business operations of CITIC Bank branches can achieve business upgrades without process modification.

Fan Bin admitted that it will take time for banks to fully apply blockchain. IBM's investment in the blockchain open source community will continue, on the one hand, to cultivate the market, and on the other hand, to compete for blocks. The commanding heights of the chain platform. With the rapid iteration of blockchain technology itself, there is still a lot of room for imagination in the scenarios in which financial institutions can use this new technology.

Content comes from Xinhuanet

❼ How to effectively promote the innovative application of blockchain technology in the financial field

On February 24, the China Securities Regulatory Commission issued a report on the Tenth CPPCC National Committee Letter of reply to Proposal No. 03009 (Finance, Taxation and Finance No. 199) of the Fifth Session of the Third National Committee. Proposed: According to the "Notice on Issuing the National Blockchain Innovation Application Pilot List" by the Cyberspace Administration of China, the People's Bank of China and the China Securities Regulatory Commission actively cooperated with the Cyberspace Administration of China to carry out the pilot work of the National Blockchain Innovation Application and took the lead in establishing the pilot list. Huaitai has established national pilot projects in the characteristic fields of "blockchain + equity market" and "blockchain + trade finance" to effectively promote the innovative application of blockchain technology in the financial field.
With the encouragement and support of multiple policies and financial regulatory authorities, it means that electronic signatures will become a digital business processing tool for financial institutions to realize online business. In the future, electronic signatures and electronic contracts have become the general trend!
Ebaoquan’s brand Junzizhuan, as a professional blockchain electronic signing platform in China, has been committed to creating a one-stop full ecological financial closed-loop service for financial institutions for many years, from signing to depositing certificates to lending. A complete set of mature, reliable and secure blockchain electronic contract solutions helps financial institutions reduce costs and increase efficiency while improving risk management.control capabilities and effectively promote the development of online business.
In addition to mature and reliable solutions, Junzi Sign has also successfully applied blockchain technology in the financial industry.
At present, the Junzi Signing Platform has established cooperation with many large domestic banks and achieved efficient business development.
Open up authoritative institutions such as Internet courts, notary offices, judicial appraisal centers, and arbitration committees to create a judicial support service system in Qiangming Town, which can provide complete evidence storage, evidence consolidation, and evidence production services. Compared with paper contracts, it has More rigorous and safe legal effect.

❽ How can blockchain technology be correctly applied to the financial industry

Looking back to 2008, blockchain technology has demonstrated the changes it can bring in different business fields. Although this technology is still in its infancy, it has already changed many industries. Various properties of blockchain, such as decentralization, immutability, and transparency, can transform business models. Especially for the banking and finance industry.

Although there are still many problems, blockchain has the potential to reduce costs and labor for the financial and banking industries. According to a Deloitte report, 24% of financial institutions around the world are familiar with blockchain technology, and North America will be more familiar with these technologies than other places. Considering the broad applicability of this technology, companies are gradually looking for different areas where blockchain can be applied.

Especially in the banking and finance industry, hundreds of funds are moving from one end of the world to the other every day. This makes the global financial system one of the industries that can profit from blockchain applications. The banking and financial industry requires a lot of manual labor. If there are any errors at this time, it will have a great impact on the financial system. According to the Global Fintech Report, in 2017, 77% of Fintech institutions hoped to use blockchain as a financial production system by 2020.

Application of blockchain in banking industry

For a basic understanding of blockchain technology and operation methods, the real question in your mind may be: Is blockchain really Can the land be applied in the banking industry? If so, how can we best leverage blockchain technology? And, most importantly, will blockchain stay where it is or move forward?

According to a report from Harvard Business School, blockchain is now to the banking industry what the Internet is to the media. Blockchain can solve many problems in the banking and financial industry. Blockchain technology has all the characteristics that reliable technology should have, including financial-related businesses.

Blockchain can provide a high level of security, especially when it comes to exchanging data, information and money. At the same time, this also allows users to take advantage of a transparent network architecture with very low operating costs, and at the same time, get decentralized help. These characteristics will make blockchain very stable, reliable and popular in the banking and financial industry.s solution.

If financial institutions want to ensure the safety of funds, they need many intermediaries. Yet these intermediaries make the entire industry more expensive. And, because there are so many people involved in the process, the chances of errors increasing. Blockchain technology can ensure the security of transfers, while also providing users with a better experience and lower costs.

Cases of banks using blockchain technology

Although banks and financial institutions were still skeptical about blockchain technology in the early days, things have changed now. . With the success of blockchain in many fields, the banking industry is looking for new areas and applications of blockchain.

Some large companies, such as JP Morgan, are confident about the future development of blockchain. The U.S. investment bank headquarters has also begun research and implementation of blockchain technology. The Quorum project is an enterprise distributed ledger and smart contract platform that can support fast transfers and throughput to solve problems in the financial industry, banks, etc. According to current news, they have issued annuity certificates with different interest rates based on distributed registries.

In addition to these, major US banks have obtained patent certificates issued by the US Patent Office. The document talks about the deployment of permissioned blockchains to ensure the security of records and to authenticate corporate and personal data.

This system will allow certified members to obtain data and record all individual members. In addition, the system will use blockchain technology to integrate multiple existing data storage platforms. This secure single network will provide overall efficiency while also reducing the number of addresses where user data is stored.

Another institution is Goldman Sachs. Goldman Sachs is also actively integrating into the research of distributed registration technology. In order to serve startups in the blockchain industry and solve the volatility of digital currencies, Goldman Sachs has invested in digital currency projects.

Goldman Sachs Group aims to become Wall Street’s leader in digital currencies. Setting up their own digital currency transactions can help them manage digital transactions well.

Cases of using blockchain technology in finance

As more application cases emerge, blockchain technology has the potential to change the current financial and banking industry. This technology can change the current banking industry through the following points:

Reduce fraud

In any financial-related project, there will be fraud. In addition, from the most basic financial model point of view, security is also the most important. More than 40% of financial entities and intermediaries, such as stock exchanges, lose money every year due toSuffered heavy losses due to financial theft.

Centralized database systems are used for financial management and operations. However, centralized databases are easy to be invaded. If there is a problem at a single point, a cyber attack will occur. Once a hacker gains access to such a system, it is easy to steal funds. This will create a need for more secure systems, with adequate security guarantees to prevent such attacks.

Since the blockchain is distributed, there is no single point of destruction. Each transfer stored in the form of blocks will be protected by an encryption mechanism and is difficult to be attacked.

Moreover, all blocks are connected to each other. Due to the mechanism of this connection, if a block is changed, all other blocks on the blockchain will immediately reflect the change. Therefore, this will help track the intrusion while also giving the hacker no chance to make changes to the entire system. With a secure blockchain system, we can prevent cyberattacks and now attacks on the banking and financial industry.

Customer identity verification Banks and financial institutions are very worried about this, so they must perform AML and KYC to reduce losses. All these processes take a lot of time, and all banks and financial institutions need to conduct all verifications independently.

According to investigation reports, this type of process costs between US$6 million and US$50 million every year. Some customer due diligence is to reduce money laundering and attacks. Currently, banks need to upload customers' KYC data to a centralized registration agency, which is used to verify the information of old or new customers.

With the application of the blockchain system, the customer verification of each bank or financial institution can also be used by other banks, and these KYC verifications do not need to be performed multiple times.

In other words, through blockchain technology, a lot of duplication of work can be eliminated. Moreover, in the not-too-distant future, all financial institutions will have access to updated customer information, reducing costs for administrators and management agencies.

Smart Assets

Trade finance becomes difficult when all assets need to be recorded with clear date and time stamps. The global supply chain includes many institutions and individuals, and participants are constantly conducting transactions. The documentation here is more complex. Blockchain can store records of these smart assets in digital form. The smart asset system will not only move items, but also track the trajectory of items.

Intelligent asset tracking systems for banks and financial institutions are also now facing a lot of competition. Banks with rich data can turn this data into customer value through blockchain.

Smart Contracts

The application of smart contracts can prove the importance of the banking and financial industry. Smart contracts are codes that can execute themselves when certain conditions are met.

When using financial transfers, smart contracts are very helpful to increase speed and simplify complex processes. Only when the conditions in the code are met, the contract will be executed and the transfer information will be ensured to be very accurate. And since these terms are visible to everyone, the chance of errors is much reduced.

Trade Finance

Trade finance is considered to be one of the most useful applications of blockchain technology in the banking industry. All parties involved, such as complex transfers, can be recorded on the blockchain network, and traders and banks share this information through a common ledger. Once a certain condition is met, the smart contract will run automatically and relevant parties can see all actions that occur.

According to relevant news, some start-ups have successfully conducted blockchain-based transaction transfers. This process usually takes 7-10 days, but now it only takes 4 hours. Compared with current infrastructure, using blockchain can significantly reduce the generation of certificates, tickets, and other fees.

Why does the banking industry need blockchain?

1. The current banking system is highly dependent on paper documents and current systems. Trustworthy and stable system upgrades are now needed to prevent any fraud and solve expansion and security issues. Blockchain technology and its decentralized nature can give the banking system the high-end technology it is looking for.

2. Banks cannot operate independently, and many transfers now go through intermediaries. Cross-border transfers take 5 days and involve many risks. Through the blockchain system, banks can make transfers very fast without taking any risks. The banks themselves are enough to solve these problems.

3. The world is moving towards digitalization. The speed of economic development is also gradually increasing, and there is no doubt that this speed will be faster. Blockchain technology will make small-amount transfers faster, while ensuring lower fees and transfer scalability.

4. In addition to banks, financial service companies are gradually using the latest technology to reform their systems and ensure market security by providing reliable services and lower rates. Banks and other financial institutions should embrace new blockchain technologies to make their ecosystems secure.

There are still many challenges to the integration of blockchain technology

Blockchain technology certainly has its advantages, but it also contains many challenges.Especially for institutions in the financial and banking industries.

Interoperability: Blockchain technology will not be bound by any international regulations, so there are no standards. As large industries, such as banks, increase their interactivity requirements, blockchain needs to be compatible with different systems and be accepted by the public. The integration of existing systems and blockchain is a very big challenge for the current system, because the existing system cannot be completely replaced. If blockchain technology can enable multiple systems to work perfectly together, then operational feasibility will be fully met.

Privacy: The endorsement of banks and financial institutions is the trust people place in depositing funds into them. If you want blockchain to replace them, it is important to ensure that the data stored in the blockchain is stored securely and does not change anyone's identity. Since transfer information is conducted publicly on the blockchain, private chains also need to be studied, which will also help solve interactivity issues.

Encryption: Private keys are a necessary element of the blockchain system because they play a very important role in ensuring personal data on the blockchain. However, once the private key is obtained, it must be stored very securely because if lost, there is no way to get it back. Moreover, there are loopholes in the encryption method used to store data, which also makes the blockchain easily vulnerable to hackers.

Security: The blockchain network is safe and reliable because it incorporates encryption technology. In order to prevent hacker attacks, any encryption performance in this type of system requires a lot of computing power. . When a blockchain network is used in any banking institution, it must be encrypted through multiple security protocols. The network needs to have enough computing power to prevent anyone from taking control except under specific access permissions. Depending on these requirements, such systems or institutions integrated into blockchain can be permissioned or permissionless. People within these organizations need to be able to handle different levels of access permissions to save the entire network from fraud and cyber attackers.

Scalability: The growth of existing data is undeniable. As the population grows, so does the size of the database. This will bring great challenges to the application of blockchain. Networks created through blockchain should be able to handle increasing traffic while also maintaining the speed of network participants. If blockchain technology can be applied to current banking systems and institutions, it must be able to guarantee the ability to handle these data flows.

Energy consumption: Most blockchain networks are based on a proof-of-work mechanism, where network participants are rewarded based on how quickly they solve problems, which is also based on how quickly they solve problems. This puts new blocks into the network. This allows the entire network to operate stably while also increasing energy consumption. This kind of computing power will consume a lot of electricity, thus affecting theEnvironmental impact. These issues need to be addressed through other incentive mechanisms before blockchain technology can be embraced.

Legal supervision: If blockchain is applied to the banking industry, international regulatory regulations are very necessary. Now, as the most popular application of blockchain, digital currency has no regulatory regulations, which has pros and cons. However, if blockchain is applied in the banking and financial industry, then regulation will be needed to prevent people from causing trouble due to losses.

Conclusion

Although regulations are very strict for the banking industry, financial institutions have also begun their journey to adopt blockchain technology as a solution. Banking giants have begun testing to find potential uses for decentralized technology.

Institutions are investing heavily in research into blockchain solutions. By allowing blockchain to enter the current industry, many problems will be solved. Because this technology makes the system more transparent, reliable, and easy to use.