HomeBlockchainExperts believe that blockchain adoption will not pose a threat to traditional...

Experts believe that blockchain adoption will not pose a threat to traditional payment system Swift

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Experts Discuss Blockchain’s Impact on Banking Systems and Swift at Financial Times Summit in London

Blockchain technology has come a long way since its emergence 14 years ago, evolving from a hyped-up concept to a practical tool that banks are now using to streamline operations and address longstanding issues. However, despite its growing popularity, experts at the Crypto and Digital Assets Summit in London today warned that blockchain still poses a distant threat to well-established systems like Swift.

Justin Chapman, global head of digital assets and financial markets at Northern Trust, emphasized that clients are primarily focused on solving capital management problems and managing liquidity and risk, rather than the technology itself. This drive towards blockchain adoption is evident in the financial industry’s efforts to address challenges related to cross-border payments, which currently rely on fragmented and complex legacy systems.

While Swift has been leading a migration to the ISO 20022 standard to improve efficiency in financial messaging, Markus Infanger of Ripple’s RippleX platform likened the organization to postmen in the age of digital communication. He acknowledged that blockchain solutions could complement existing networks like Swift, but a full migration is unlikely in the short to medium term.

Philippe Meyer of BBVA echoed this sentiment, noting that Swift’s longstanding presence in the industry makes it difficult to replace overnight. However, Joey Garcia of Xapo Bank highlighted the need for integrated systems to facilitate transactions in a rapidly evolving digital landscape.

One area where blockchain is gaining traction is in the repo market, where the lack of existing infrastructure makes it ripe for disruption. Chapman and Meyer both emphasized the potential of blockchain to improve liquidity risk management and enhance transparency in markets like the carbon credit industry.

Overall, the consensus among experts is that blockchain technology has the potential to revolutionize the financial industry, but its widespread adoption will require a gradual transition and careful integration with existing systems. As banks continue to explore the possibilities of blockchain, the future of finance may be shaped by this innovative technology.

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