区块链和金融法的联系与区别,区块链和金融法的联系和区别

1. What is blockchain technology and how does it change business and financial models

What is blockchain technology and how does it change business and financial models? According to reports, since the end of March, the tour guide team led by Yang Feihu has been receiving inquiries from out-of-town individual tourists. "There are many families traveling to Wuhan from out of town. Several families come together by car or by high-speed rail," Yang Feihu said. , Yellow Crane Tower, Hubei Provincial Museum, and East Lake Scenic Area are still places to check in. "It's hard to get a ticket for the Hubei Provincial Museum now, and all the seats for the May Day period have been reserved." He and a number of parents looking for relatives went to Shuidun Town, Zijin County, Heyuan City, Heyuan City. Because Zhang Weiping once confessed that this was the place where Aunt Mei lived, and it was also the place where 8 of the 9 abducted children in the "Aunt Mei Case" were sold.

2. An analysis paper on the prospects of blockchain in the financial field

An analysis paper on the prospects of blockchain in the financial field

Blockchain technology was born in 2008 In 2006, the first application was Bitcoin. Blockchain technology uses a decentralized consensus mechanism to maintain a complete, distributed, and non-tamperable ledger database, allowing participants in the blockchain to implement a unified ledger system without establishing a trust relationship. . In 2015, many mainstream financial institutions in Europe and the United States recognized the application prospects of this technology and explored the application of blockchain technology in the financial field. The International Monetary Fund pointed out in a report that "it has the potential to change finance." Some people believe that blockchain technology will change human society as profoundly as double-entry accounting and shareholding.

Blockchain will make it possible for all individuals to become important nodes in the allocation of financial resources. It will also promote the improvement of the existing financial system and financial rules, and build a shared and win-win situation. type of financial development ecosystem. The emergence of blockchain technology is a revolution in human credit creation. It allows both parties to the transaction to carry out economic activities without the need for third-party credit intermediaries, thereby achieving low-cost value transfer. It can be said that blockchain technology is a more efficient value exchange technology in the Internet era. The Internet has evolved from an information Internet that transmits information to a value Internet that transfers value. This is conducive to traditional financial institutions taking advantage of the opportunity to transform and transform endogenous businesses. Processes and application scenarios are Internetized.

1. Characteristics and shortcomings of blockchain

(1) Main characteristics of blockchain

(1) Decentralization. In the blockchain, there is no centralized hardware or management organization. The distributed structure system and open source protocol allow all participants to participate in the recording and verification of data, which is then sent to various nodes through distributed propagation. Each participant The nodes are all "self-centered", and the rights and obligations are equal. Blockchain is not simply decentralized, but multi-centered or weakly centered. When the Internet of Things makes it possible for all individuals to become central nodes, the central status of traditional financial intermediaries changes.Monopolistic, resource-advantaged centers and strong intermediaries are transformed into open platforms and become differentiated centers among service-oriented multi-centers.

(2) To trust. From a trust perspective, blockchain uses a set of open and transparent mathematical algorithms based on consensus specifications and protocols to enable all nodes to automatically and securely exchange data in a trustless environment. Blockchain essentially solves the problem of trust through mathematical methods. All rules are expressed in the form of algorithmic programs. Participants do not need to know the credit level of the counterparty, and do not need transaction endorsement or guarantee verification from a third-party institution. They only need trust. A common algorithm creates credit, generates trust, and reaches consensus for participants through the algorithm.

(3) Timestamp. Blocks are generated by packaging data and code within a period of time. The header of the next block contains the index information of the previous block, and a chain is formed by connecting the end to the end. The blocks that record the complete history and the chain that can be completely verified form a timestamp that can trace the complete history. It can provide retrieval and search functions for each piece of data, and can use the blockchain structure to trace the source, one by one. verify. Therefore, the blockchain is timestamped when generated, forming a database that cannot be tampered with or forged. Modifications to the database on a single node are invalid unless more than 51% of the nodes in the system can be controlled at the same time, so the data reliability of the blockchain is very high.

(4) Asymmetric encryption. Blockchain uses an asymmetric encryption algorithm, that is, a "key pair" is used in the encryption and decryption process. The two keys in the "key pair" have asymmetric characteristics. In blockchain application scenarios, on the one hand, the key is a public key visible to all participants. Participants can use the public key to encrypt a piece of authenticity information, and only the owner of the information can use the private key to decrypt it. On the other hand, the private key is used to sign the information, and the signature is verified by the corresponding public key to ensure that the information was sent by the real holder. Asymmetric encryption minimizes friction boundaries in value exchange, enables transparent data anonymity, and protects personal privacy.

(5) Smart contract: Since the blockchain can realize point-to-point value transfer, corresponding programming scripts can be embedded during transfer. This smart contract method is used to handle some unforeseen transaction patterns and ensure Blockchain can continue to be effective. This kind of programmable script is essentially a list of many instructions to achieve pertinence and conditionality in value exchange and to achieve specific uses of value. Therefore, any value exchange activity based on the blockchain can achieve hard control over its use, direction and various restrictions through intelligent programming, eliminating the cost of soft constraints by law or contract.

(2) Main problems of blockchain

(1) High energy consumption problem. There is an impossible triangle in the traditional currency and banking system, that is, it is impossible to achieve decentralization, low energy consumption and high security at the same time. The impossible triangle also exists in the construction of blockchain. For example, in the practical application of Bitcoin, its development has brought about the rapid expansion of computer hardware.The main costs in the "mining" process shift to hardware costs and electricity costs. Therefore, after applying blockchain technology to achieve equity cost benefits, maximizing its technical efficacy has become an urgent problem to be solved.

(2) Storage space problem. Since the blockchain records every transaction information from the initial information in the system, and each node has to download, store and update data blocks in real time, if the data of each node is completely synchronized, the network pressure will be great, and each node will The storage space capacity requirements of each node may become a key issue restricting its development.

(3) The problem of stress resistance. The system built based on the blockchain follows the barrel theory and must take into account the worst processing speed and network environment among all network nodes. Therefore, if the blockchain technology is promoted to a large-scale transaction environment, its overall stress resistance It remains to be verified. If the transaction volume generated per second exceeds the design capacity of the system (the weakest node), transactions will automatically enter the queue and be queued, resulting in a poor user experience.

2. Application of blockchain in the financial field

(1) Financial infrastructure

Blockchain may be used as the infrastructure of the Internet in many fields. All show broad application prospects. In the financial industry, blockchain technology will first affect financial infrastructure such as payment systems, securities settlement systems, and transaction databases. Later, the technology will also expand to general financial services, such as credit systems, "anti-money laundering," etc. This is because, based on the characteristics of blockchain technology, it will first enter the infrastructure field with high trust requirements and high cost of traditional trust mechanisms. In the past, infrastructure was a public product, but new technologies and new systems of blockchain have made it more It is possible for multiple people to participate in the provision of public goods. The future of Internet finance will use Internet technologies such as blockchain to transform the core production systems of traditional financial institutions and build financial enterprises on the Internet.

The current information Internet can be collectively referred to as the TCP/IP model, and HTTP is the most important application protocol in the application layer. In the Internet of Value, blockchain is a point-to-point transmission protocol in the application layer. Its value is the same as that of the HTTP protocol in the information Internet. The huge potential and prospect of blockchain is that it can reconstruct the infrastructure and core production systems of the traditional financial industry, not just at the application level such as APPs. This is because, at the network level, the blockchain is based on the IP communication protocol and the distributed network; at the data level, the blockchain database system is brand new and is significantly better than the existing one. There is a database of the financial system; at the application level, registration and settlement, clearing systems, smart contracts, and the Internet of Things based on the blockchain can greatly improve efficiency. Financial activities on the blockchain are programmable finance. .

(2) Digital Currency

From the perspectives of security and cost, it is a general trend that banknotes will be replaced by new technologies and new products. The establishment of digital currency issuance and circulation system is important for the construction of financial infrastructure.Construction and economic development are both very necessary. Following the integration of traditional currency and digital currency, the issuance, circulation and trading of digital currency should be led by the central bank, reflecting convenience and security, and achieving a balance between protecting privacy, maintaining social order, and combating illegal and criminal activities. It is conducive to the effective operation and transmission of monetary policy. It is necessary to retain the control of monetary sovereignty. Digital currency is freely convertible and controllable.

The success of blockchain technology on Bitcoin proves the feasibility of programmable digital currency. Research from the Bank of England suggests that central banks could consider issuing blockchain-based digital currencies, which could increase financial stability. The technical routes of digital currency can be divided into two types: account-based and non-account-based. They can also be used in layers to try to coexist. The characteristic of blockchain technology is distributed bookkeeping, which is not account-based and cannot be tampered with. If the digital currency focuses on protecting personal privacy, this technology can be used. However, the current blockchain occupies too many computing resources and storage resources and cannot cope with the current scale of transactions. This problem needs to be solved before it can be promoted and applied.

(3) Self-finance

From the perspective of services and non-monetary creation, modern finance is realized through intermediaries. In the Internet era, it is possible to achieve direct finance in the true sense of disintermediation. However, this possibility is not complete. The main reason is that the current Internet finance is based on the original finance and cannot be jumped out. Blockchain technology provides a possibility. Blockchain can be divided into public blockchain and private blockchain. Public blockchains are like Bitcoin. Once the protocol is approved, it becomes an integral part of the blockchain. Private blockchains still need to be permissioned, and blockchain technology in banking systems requires auditing of each participant. Private blockchain is very similar to a form of self-finance, and public blockchain is more similar to the support and guarantee for the bottom layer of private blockchain. When blockchain technology is widely used and third-party financial management technology is generally available, self-financing based on blockchain technology will become completely possible.

3. Blockchain Application and Financial Supervision

Blockchain technology is currently the only tool that can be used to record and prove transaction consistency and company financial accuracy without the need for a third party. Therefore, it can meet the requirements of potential regulators and the public for audit effectiveness, accuracy and timeliness, and has broad application prospects in the financial field. However, its development is still restricted by the current system. On the one hand, blockchain has had an impact on the current system because its decentralized and autonomous characteristics dilute concepts such as the state and supervision. For example, digital currencies represented by Bitcoin challenge the country's right to issue currency and regulate monetary policy, causing monetary authorities to take a conservative attitude towards the development of digital currencies. On the other hand, the regulatory authorities also lack full understanding and expectations of this new technology, and the establishment of laws and systems will be seriously lagging behind, resulting in the lack of necessary institutional norms and legal protection for blockchain applications, and increasing the number of market entities.risks of.

Once blockchain financial technology is widely deployed in the financial industry, the de-financial nature of supervision will occur, and supervisory functions, supervisory methods and supervisory means will be redefined. For example, if securities lending, repurchases, and margin trading can be traded through the blockchain, regulatory authorities can consider using the information from this public ledger to monitor systemic risks in the market, which is not only efficient but also reliable. From a macro-financial perspective, after the emergence of the financial era, the currency creation and transmission mechanism and the credit creation pattern will change. From a micro-finance perspective, with the further development of blockchain technology, finance and business have become difficult to distinguish, and will transcend the meaning of separate and mixed industry supervision. The reform of the financial supervision system needs to be discussed from this perspective.

The "decentralization" brought about by blockchain technology still requires centralized departments to provide regulatory and guarantee support. Regulators can proactively embrace new technologies in Internet finance. U.S. Securities and Exchange Commission member Kara Stein believes that regulators need to be in a leading position, taking advantage of the advantages of blockchain technology and quickly responding to its potential weaknesses. For example, blockchain technology hopes to break privileges and human manipulation and allow computer algorithms to achieve "free credit notarization." But in practice, due to the lack of supervision, digital currency transactions such as Bitcoin face high risks of speculation and money laundering. Therefore, the application of blockchain technology requires regulatory authorities to formulate relevant standards and specifications to ensure that financial innovative products are used appropriately. At the same time, it is necessary to improve the protection of consumer rights and interests, strengthen education on the protection of financial consumer rights and interests, and improve consumers' awareness of risk prevention.

3. What is blockchain technology and how does it change business and financial models

Blockchain technology is a distributed ledger technology. It allows multiple participants to jointly maintain a secure, transparent and immutable record on a decentralized network. Blockchain technology was originally designed for the digital currency Bitcoin, but is now widely used in many other fields.

The core features of blockchain technology include:

Decentralization: Blockchain has no central control agency, and data is distributed on various nodes in the network, which makes it decentralized. The centralization feature reduces the risk of single points of failure.

Transparency: Transaction records on the blockchain are public to all participants, and anyone can view these records. This helps increase trust and reduce the risk of fraud.

Immutable: Once a transaction is recorded on the blockchain, it cannot be easily modified or deleted. This guarantees data integrity and security.

Smart contracts: Transactions on the blockchain can be automatically executed to implement "smart contracts", which automatically execute corresponding operations when specific conditions are met. This helps simplify complex business processes and reduce costs.

Blockchain technology has had a profound impact on business and financial models, which is mainly reflected in the following aspects:

Reducing costs:Blockchain technology can reduce intermediary links and reduce transaction costs and operating costs. For example, by adopting blockchain for cross-border payments, remittance fees can be significantly reduced.

Improve efficiency: The automation and smart contract features of blockchain technology help improve the efficiency of business processes, reduce manual intervention, and reduce error rates.

Enhance trust: The transparency and non-tamperability of blockchain technology help to establish a reliable trust system, reduce the risk of fraud, and provide better protection for business activities.

Innovative business models: Blockchain technology has spawned many new business models, such as decentralized finance (DeFi), digital asset trading, supply chain finance, etc. These new business models have brought disruptive changes to existing industries.

In short, blockchain technology, as an emerging technical means, is gradually changing the landscape of business and finance. With the continuous development of technology and the in-depth promotion of applications, blockchain is expected to have a broader and far-reaching impact in the future

4. How to use blockchain technology applications to promote the prospects of integrating green finance with industry and finance And what is the significance?

A core function of the blockchain is cross-validation and risk control, which can reduce financial risks and improve financial efficiency.
The integration of industry and finance is mainly to promote the return of finance to the real service economy. Blockchain can help funders find better projects, so that good industries will develop better with financial support.
Data on corporate accounts receivable can often directly reflect the company's production and sales scale, corporate efficiency, financial status and other information, and are closely related to the development and survival of the company. In recent years, accounts receivable in various industries across the country have remained high, which has seriously affected the capital turnover of enterprises, making it impossible for enterprises in the debt chain to operate normally, struggle, and even go bankrupt. Therefore, the management of accounts receivable has become a very important issue in business activities. How to monitor the occurrence of accounts receivable and how to deal with the company's bad debts? From a legal perspective, attention needs to be paid to preventing accounts receivable risks, collecting accounts by legal means, and collecting evidence. In the course of business operations, a company may generate a lot of accounts receivable, or even have debt disputes, and the company may suffer losses as a result. Yuntu Supply Chain Finance has been deeply involved in the field of supply chain finance for many years and has helped many small and medium-sized enterprises achieve supply chain financing. Based on practical experience, it will analyze in detail the legal issues that companies may encounter in debt collection, hoping to prevent problems before they happen. Helps. Yuntu@Supply Chain Finance% is pretty good. Follow "Yuntu Finance" to get useful information on supply chain finance every day.

5. What is blockchain technology and how does it change business and financial models

What is blockchain technology and how does it change business and financial models? Joining the EU and NATO is just a cake-cake given by the West to satisfy hunger. In fact, at least at the current conflict between Russia and Ukraine, and before Russia and Ukraine fail to completely resolve the border issue, the dreams of the EU and NATO are just a dream for Ukraine.! In Zhuang Ci's view, the positioning of basic subject research centers should be high enough and can be built on the basis of research institutes or universities with good foundations. The government should provide sufficient and stable support funds. An ideal operating model is to follow the example of Japan. "World's Top International Research Center (WPI)" program.

6. Application of blockchain in the financial field

1. Application and development of blockchain

Some Internet, Internet start-ups and traditional finance The industry has begun to try and apply blockchain in some projects

2. Domestic financial institutions are testing the waters of blockchain

Various financial institutions are testing the waters one after another, and they are basically in the conceptual experimental stage and have not yet Large-scale commercial use.

3. Panoramic view of blockchain application in the financial field

4. Ghostwriting

5. Digital bills

Bills are an important financial product in the financial market. They have dual functions of payment and financing. They are of high value and bear bank credit or commercial credit. Once a bill is issued, its face amount, date and other important information cannot be changed. Bills also have circulation attributes and can be accepted, endorsed, discounted, rediscounted, collected and other transactions within a specific life cycle. Once the transaction is completed, the transaction cannot be revoked. There are two characteristics in the circulation of bills: First, the circulation of bills mainly occurs through bank acceptance bills, and the number and circulation of commercial acceptance bills are small; second, each bank independently conducts credit granting and risk control on the bill business, and a single bank's Risk control results may affect other participants in the bill market transaction chain.

The experimental production system of the digital bill trading platform uses SDC (Smart Draft Chain) blockchain technology to protect privacy with the help of homomorphic encryption, zero-knowledge proof and other cryptographic algorithms. The Byzantine Fault Tolerance Protocol (PBFT) performs consensus and uses a see-through mechanism to provide data monitoring.

The experimental production system includes four subsystems: stock exchange, bank, enterprise and monitoring: the stock exchange subsystem is responsible for managing the blockchain and monitoring the digital bill business; the bank subsystem has Digital bills have business functions such as acceptance and receipt, discount signing, rediscounting, collection and repayment; the enterprise subsystem has digital bill issuance, acceptance, endorsement, discount, prompt payment and other servicesservice function; the monitoring subsystem monitors the status of the blockchain and business occurrences in real time

6.

7. What is blockchain finance? What does blockchain finance mean?

Blockchain finance is actually the application of blockchain technology in the financial field.

Blockchain is an underlying technology based on Bitcoin, and its essence is a decentralized trust mechanism. Collectively maintain a sustainable growing database through sharing among distributed nodes to achieve information security and accuracy. The application of this technology can solve the trust and security issues in transactions. Blockchain technology has become an optional direction for the future upgrading of the financial industry. Through the blockchain, both parties to the transaction can carry out economic activities without resorting to third-party credit intermediaries. activities, thereby reducing the cost at which assets can be moved around the world.

(7) Extended reading on the relationship between blockchain and financial law:

Since 2016, major financial giants have also taken notice of this trend and have begun to carry out regional Blockchain innovation project explores the possibility of applying blockchain technology in various financial scenarios. In particular, Puyin Group took the lead in pioneering the “blockchain+” standard digital currency. Standardized digital currency is an asset that has been completed by a third-party organization through processes such as identification, evaluation, ownership confirmation, and insurance. It is written into the blockchain through rigorous digital algorithms to form a standard corresponding relationship between assets and digital currency, which is called standardization. Digital currency.

In order to realize the great leap forward development of blockchain finance, in order to promote the new development of China’s economy, accelerate the circulation of global assets, and realize the dream of rejuvenation that generations of people have been striving for, Puyin Group will The Puyin Blockchain Finance Guiyang Strategy Release Ceremony was held in Guizhou on the 9th. At the meeting, the digital circulation of assets realized by blockchain, the blockchain financial transaction model, and the application of blockchain services and social public industries will be discussed. Discuss.

8. What impact does blockchain technology have on current laws?

The impact of blockchain technology on current laws mainly includes the following points:

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1. Blockchain technology will impact the existing rules of property law. Article 2 of the current Property Rights Law stipulates that the property in this law includes movable property, immovable property and property rights stipulated by law. With the development of blockchain technology, information data, virtual property, digital currency or digital bills generated based on blockchain technology have challenged traditional property rights laws. It is difficult to determine their ownership under current property rights laws. Whether its ownership can be clarified in the future The ownership and implementation of transactions in the financial field are issues worth considering.

In addition, how to establish, change or eliminate the usufructuary rights and security rights of these virtual properties in the decentralized blockchain is also difficult to match the provisions of the current property rights law. In addition, if blockchain technology is used for property rights registration such as real estate, vehicles, ships, etc., it will also change the existing rules and methods of property rights registration. Future property rights laws need to sort out and clarify these issues.

2. Blockchain technology willReinventing contract law. Smart contracts generated based on blockchain technology will change the rules of the current contract law. The way in which the intention of a smart contract is expressed will be greatly different from the way in which the parties to a contract enter into an expression of intention in the current contract law. Under what circumstances Issues such as consensus of intention and agreement need to be clarified in contract law. In addition, smart contracts can be automatically executed, or it can be said to replace human performance of contracts. Therefore, the relevant provisions of contract performance under the current contract law may no longer meet the needs of smart contracts, and the rules of contract law may need to be changed or even restructured. Plastic.

3. Blockchain technology may lead to changes in corporate law rules. The application of blockchain technology in company industrial and commercial registration will help simplify the company's industrial and commercial registration process and improve its reliability. The application of smart contracts will lead to the de-manualization of equity changes. The election of company shareholders and directors as well as the resolutions of shareholders' meetings and board of directors can also be written into the blockchain for reliable records. The company law needs to confirm the effectiveness of using blockchain technology for industrial and commercial registration and recording company resolutions.

4. The widespread application of blockchain technology in the financial field will lead to changes in financial laws and regulations such as securities law, currency law, foreign exchange management law, banking law, bill law, and insurance law. Some of them require fundamental changes. changes and system reconstruction, some need to be adjusted according to the specific application of blockchain technology.

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

On February 24, the China Securities Regulatory Commission issued Notice No. 03009 on the Fifth Meeting of the 13th CPPCC National Committee (Finance, Taxation and Finance No. 199) Proposal reply letter. 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 and control capabilities and effectively promoting 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 the Internet courts, notary offices, judicial appraisal centers, arbitration committees and other authoritiesThe agency has built a judicial security service system in Qiangming Town, which can provide complete evidence storage, evidence consolidation and evidence production services, and has a more rigorous and safe legal effect than paper contracts.

10. 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 a very stable, reliable and popular solution for the banking and financial industry.

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 and also provide users with a better experience, the cost is also lower.

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, suffer significant losses every year due to financial theft incidents.

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, adequate security guarantees are needed 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 certifications 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 important for increasing speed and simplifying complex processes.Cheng was very helpful. 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 the financial and banking industries. of institutions.

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. of existing systems and blockchainIntegration is a very big challenge for current systems because existing systems cannot be completely replaced. If blockchain technology can allow 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 cryptography 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 type of computing power consumes a lot of electricity and has an impact on the environment. 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 the districtWhen blockchain is applied in the banking and financial industries, supervision is necessary 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.