The Future of Finance: Blockchain Technology Set To Reshape the Financial Landscape

For a while now blockchain has been considered a disruptive element in the field of banking, as it has several advantages that enable crypto transactions to far outstrip traditional systems. It is for this reason that I believe there is no future of payments that does not involve cryptocurrency and blockchain technology in some shape or form. 

World Bank data indicates that there are around 1.4 billion people across the world who remain unbanked today. Meanwhile, modern FinTech firms are leveraging blockchain technology and smart contracts to offer payment solutions that are faster, cheaper, and more secure to such people. A recent

report by Technavio stated that the growing demand for digital payments boosted the crypto market in 2022 and that it will continue to grow in size, reaching $1.8 billion by 2027. 

In this article, I will take a closer look at where FinTech companies stand today in relation to traditional banking, as well as what both sides need to continue growing and evolving in their relationship.

FinTech Companies Are Shaping Financial Services of the Future 

In response to the global financial transformation, fintech companies are progressively offering crypto-based services that enable individuals and businesses alike to conduct their financial operations through alternative means, without relying on banking. 

One example of a service developed by such companies is digital wallets that allow users to store and manage their assets. These wallets are going to be the foundation for the new financial system, as they essentially act as an alternative to traditional bank accounts, allowing users to send and receive payments globally. A
study by Juniper Research predicts that the number of digital wallet users across the world will exceed 5 billion by 2026, as the so-called ‘super apps’ will drive further separation from cash and traditional banking.

Indeed, many neobanks today are putting effort into developing multi-functional applications that streamline digital payments by allowing users greater convenience in managing all their finances in one place. The next logical step here is to add crypto-powered tools to these apps and transform them into full-scale banking systems of the new generation. Before long we will be seeing ‘crypto-banks’ that will fulfil the same core function but enable people to manage their funds in both crypto and fiat currencies. 

At Mercuryo we have already developed a Banking-as-a-Service solution that fulfils exactly this role. By integrating such a solution on their platforms, businesses can enable their users to perform all relevant financial operations through a unified interface, switching between currency types and transacting freely to suit their ongoing needs. All of which can be accomplished at significantly reduced time and costs, compared to traditional financial counterparts, thus making it easier for businesses and consumers alike to transact globally with minimum effort.

Governments Look To CBDCs To Transform Their Finances

We are already seeing many cases of governments across the world attempting to develop crypto regulation and diving into the creation of

their own central bank digital currencies (CBDCs). Financial experts and organisations have a clear understanding that with the way things are going, in about 10 years the traditional banking system will no longer be viable, becoming a thing of the past. And so they are actively testing ways to bring crypto and TradFi together and develop this union into a new international financial system.

The biggest advantage that traditional banking holds over blockchain-based systems today is that it simply already has a robust regulatory system centred around itself. Crypto, on the other hand, is a recently-emerged, fast-paced industry, so regulators have to put a lot of effort into keeping up with all the innovations and trying to develop appropriate legal frameworks for them. 

Furthermore, there are also crypto purists who don’t wish to put trust in institutions and believe that adhering to governmental regulation would mean taking a step back from blockchain’s ideal of decentralisation. However, it needs to be understood that the crypto industry will not remain a ‘Wild West’ forever – it will absolutely come under regulation, as crypto and TradFi learn to coexist together. And when that happens, mass adoption of crypto will take a big step forward, allowing the overall financial industry to benefit from embracing the innovation.

Conclusion

Achieving a cohesive balance between blockchain-based innovation and the stability of TradFi is set to bring about a new evolutionary step in the global financial landscape. As FinTech companies continue to grow and improve their services, it’s crucial that they maintain cooperation with traditional banks. Collaboration between FinTech startups and established financial institutions can pave the way for industry advancement and the development of a more robust international financial system. 

• SEO Powered Content & PR Distribution. Get Amplified Today.
• EVM Finance. Unified Interface for Decentralized Finance. Access Here.
• Quantum Media Group. IR/PR Amplified. Access Here.
• PlatoAiStream. Web3 Data Intelligence. Knowledge Amplified. Access Here.
• Source: https://www.finextra.com/blogposting/24351/the-future-of-finance-blockchain-technology-set-to-reshape-the-financial-landscape?utm_medium=rssfinextra&utm_source=finextrablogs