By raising standards for efficiency, trust, and integrity of data, blockchain looks set to upend traditional enterprise finance in coming years. Below, we explore the potential of blockchain for finance and look at some of the enterprise market’s early movers, including a fully end-to-end digital letter of credit.
Financial transactions across the world today are becoming more efficient thanks to decentralization and peer-to-peer interchanges, made possible by blockchain and distributed ledger technologies. By design, these technologies have proved very effective in simplifying traditional transaction processes and enabling instant payment solutions globally.
What is cryptocurrency?
A cryptocurrency, such as Bitcoin, is a decentralized digital currency that is based on blockchain technology. Unlike fiat money which is a currency declared legal by a central government and is backed by said issuer, cryptocurrency is not backed by any central authority. Through distributed ledger technology that can record and synchronize electronic ledgers across multiple computers (known as nodes) globally, rather than a central database, cryptocurrencies also eliminate the need for intermediaries and their related costs.
Although blockchain evolved with smart contracts several years ago, opening the door for blockchain to be deployed across a wider variety of industries, banks and financial sectors still represent by far the highest share of blockchain deployments today, mainly for clearing settlements, cross-border payments, and digital identity management. According to a report by Jupiter Research, blockchain deployments will enable banks to realize savings on cross-border settlement transactions of up to USD 27 billion by the end of 2030 - reducing costs by more than 11 percent.
What is decentralized finance?
Decentralized finance, also known as DeFi, is the umbrella term used for peer-to-peer financial services by using blockchain technology. This makes it an alternative financial system that can compete with centralized services in terms of accessibility, resilience, and transparency in a peer-to-peer fashion.
Continue reading: https://www.ericsson.com/en/blog/2022/6/enterprise-blockchain-finance
Financial transactions across the world today are becoming more efficient thanks to decentralization and peer-to-peer interchanges, made possible by blockchain and distributed ledger technologies. By design, these technologies have proved very effective in simplifying traditional transaction processes and enabling instant payment solutions globally.
What is cryptocurrency?
A cryptocurrency, such as Bitcoin, is a decentralized digital currency that is based on blockchain technology. Unlike fiat money which is a currency declared legal by a central government and is backed by said issuer, cryptocurrency is not backed by any central authority. Through distributed ledger technology that can record and synchronize electronic ledgers across multiple computers (known as nodes) globally, rather than a central database, cryptocurrencies also eliminate the need for intermediaries and their related costs.
Although blockchain evolved with smart contracts several years ago, opening the door for blockchain to be deployed across a wider variety of industries, banks and financial sectors still represent by far the highest share of blockchain deployments today, mainly for clearing settlements, cross-border payments, and digital identity management. According to a report by Jupiter Research, blockchain deployments will enable banks to realize savings on cross-border settlement transactions of up to USD 27 billion by the end of 2030 - reducing costs by more than 11 percent.
What is decentralized finance?
Decentralized finance, also known as DeFi, is the umbrella term used for peer-to-peer financial services by using blockchain technology. This makes it an alternative financial system that can compete with centralized services in terms of accessibility, resilience, and transparency in a peer-to-peer fashion.
Continue reading: https://www.ericsson.com/en/blog/2022/6/enterprise-blockchain-finance
