Published : 6 years ago, on 21/08/2018

It is no secret to anyone that the main banking systems around the world are eyeballing blockchain technologies as a potential panacea for the many issues that have been plaguing the industry. There are dozens of applications for blockchain and banking has always seemed to be one of the most promising directions for the technology’s application. And Credits, a blockchain based platform with high TPS speeds, low transaction costs and an open API bypasses all the current technological limitations that make it difficult to use blockchain in the modern banking sector.

According to a study conducted by the Accenture consulting company, which specializes in strategic planning, over half of all top managers admit that blockchain is going to play a key role in the success of financial companies in the near future.

Accenture analysts have found that the world banking sector will save up to $20 billion by 2022 by implementing blockchain technologies. The Credit Data Processing Bureau, which is subordinate to the Polish Bank Association, records the credit histories of about 150 million Europeans. The British fintech company Billon Group, which received EUR 1 million of investments from the EU last year, created a unique blockchain-based solution for the bureau to process customer data.

According to KPMG, in 2016, venture capital funding to global fintech companies reached a record $13.6 billion while overall investment in fintech companies totaled $24.7 billion.

The largest Spanish banking group, also one of the leaders in the UK, Grupo Santander is a pioneer in the implementation of blockchain technology in the banking industry. Santander, controlled by Banco Group, has implemented a fully functioning One Pay FX payment system running on blockchain. The primary goal of the system is to optimize payments between Europe and South America with the use of distributed ledgers. The bank Goldman Sachs actively supports and studies distributed registry technology, and has already invested in the Circle cryptocurrency project. Bloomberg has reported that the bank intends to become the leader in the use of cryptocurrency among its Wall Street competitors, through the creation of its own cryptocurrency unit which will deal exclusively with digital currency trading operations.

The immense number of transactions made every second by VISA and MasterCard is no longer capable of ensuring the full scope of convenience and services that banking organizations have gotten used to. Therefore, they are looking for more convenient solutions that would be capable of providing both high bandwidth and throughput with scalability and high speeds. It is here that Credits can offer scalability, high transaction speeds with hundreds of thousands per second, BFT and DPOS instead of POW, asynchrony in the formation of blocks and the distribution of the previous block on network nodes.

According to a survey by The International Securities Association, 55% of banking companies polled are monitoring, researching, or developing solutions on top of blockchain for their payment services. The promise of blockchain as banking technology can be of benefit to the gargantuan industry as it can eliminate the need to rely on intermediaries to approve transactions between consumers, as blockchain technology could facilitate faster payments at lower fees than banks. Clearance and Settlement Systems can use blockchain to reduce operational costs and bring users closer to real-time transactions between financial institutions. Commissions on blockchain-based systems are meager when compared to traditional banking fees and offer competitive exchange mechanisms with various fiat and crypto pairs that virtually no traditional banks on the market are allowed to conduct operations with.

By providing blockchain companies with immediate access to liquidity open crowdfunding schemes, the blockchain is creating a new cryptoeconomic model of funding that provides access to capital from traditional financial services without the need to risk applying to banks, which can simply refuse loans after conducting stringent background checks, oftentimes turning blind, bureaucratic eyes at promising ideas. The idea of tokenizing traditional securities such as stocks, bonds, and alternative assets is inherent to blockchain as new, open source structure of capital markets. Last but not least, by removing the need for gatekeepers in the loan and credit industry, such as banks, blockchain can make it more secure to borrow money and provide lower interest rates to the millions of unbanked around the world.

Micropayments are on the move to blockchain as cryptocurrencies are gaining popularity and the need to process transactions fast and in a transparent, anonymous fashion is gaining grounds over traditional payment services that require lengthy KYC checks, anti-money laundering procedures and complete disclosure of client information to relevant authorities. Traditional and currently available blockchains may well be the solution, but they have a large number of limitations, one of which is the problem with scalability. It is only a matter of time before the number of transactions skyrockets and the blockchain will simply be unable to process such a huge number of operations. As banal as it may seem, even a basic video game like Cryptokitties was capable of knocking out the entire Ethereum network for days back in December 2017. It is not difficult to imagine what will happen when the entire Indian market moves to crypto operations with the inevitable legalization of cryptos in the country.

In addition, clients will want their transaction to be moved into the blockchain sector for its many advantages, such as speed and anonymity. It is therefore the calling of the fastest next-generation blockchain systems, like those offered by Credits, to cope with the demands for transaction speeds. The sophisticated mechanics for processing the conditions of the transaction, with cycles and recursions provided by smart contracts are no longer an issue, and authorities need not worry about illegal operations as reputable transaction systems striving for legalization are obliged to enforce very stringent KYC and AML requirements. The Credits platform has full-featured smart contracts written in a simple but robust Turing language (Java VM) that allows for unprecedented levels of performance as transactions are processed in around 0.01 seconds. Any high-load transaction systems can thus be built on its basis, and its universality allows for building any dApps with API and SDK for integration.

It takes a long time for any promising technology to be fully adopted by the mass market and blockchain is absolutely no exception. However, the technology aims to disrupt the current banking system by offering a completely different approach to the issue of transfers.

Having an open platform with an underlying system that is transparent, scalable and faster than anything offered by modern technologies is an open gateway to building an entirely new and alternative system of payments and banking that would not be bound by traditional and oftentimes cumbersome legal requirements. In addition, such a new system would be like a brick puzzle, open to new additions. And this leaves immense room for the addition and incorporation of various services that could be built on top of the existing infrastructure. It is not difficult to imagine a completely new ecosystem built on the Credits platform with an immense number of convenient services on a single venue that would cater to the many participants of the banking industry.

Anything from exchanges, broking services, transfer systems and accompanying funds and fund gateways and pools would be available on the same platform with the inherent benefits of immediate execution of tasks, full transparency, lack of risk of non-payment and anonymity.

Just as PayPal had grown into a major player with over $10 billion in revenue and $30 billion in assets, blockchain companies like Credits are offering their alternative services to the banking industry’s participants, thus creating the bedrock for a new economy oriented not at the megacorporation, but the convenience of the client.