Blockchain will revolutionise the global payments system, as digital currencies continue to grow in popularity, says deVere CEO Nigel Green.
The US Federal Reserve recently launched an in-depth discussion paper about introducing a digital dollar, while China is piloting a digital renminbi. The European Central Bank has also made progress towards a digital euro and Sweden has finalised a technical pilot.
Green says: “Bitcoin and other cryptocurrencies are reaching the point of critical mass, the moment at which a new way of doing things crosses a threshold and takes hold. Most governments around the world have already realised that digital is the inevitable future of money. The move towards digital transactions had been taking place for years but has been accelerated since the start of the pandemic.
“For this reason and because the likes of Bitcoin are out of their control, they’re in a race to launch digital currencies of their own, fully aware that digital currencies in our digital era simply make sense.”
Beyond existing demand, Green says the rise of digital payments will be driven by harnessing the power of blockchain. Recent research has shown that blockchain technology will help to create a payment system that’s more powerful and faster than the card payment and instant payment systems currently used. In addition, payments made with this technology used less energy than credit card payments.
Green says: “Major financial institutions could slash tens of billions of dollars each year using distributed ledger technology by decommissioning legacy systems and reducing operating costs. For consumers, high global remittance costs that exist because of complexities involved in routing and central intermediaries will be all but eliminated.”
He adds: “The ability to track funds on a tamper-proof ledger is a powerful preventative security measure.”
While blockchain is likely to take five to 10 years to reach maturity, Green says it will create a snowball effect across global payments.
Green notes: “Due to the lightning pace of blockchain innovation and adoption across every sector, blockchain is set to irreversibly shake up the global payments system. It will be a snowball effect.
“Blockchain will support a payment system that’s faster, greener, cheaper and safer than the systems of today and as a result, it will be the main driver for the anticipated global surge in digital transactions. Blockchain’s seismic influence will change how we pay and how we do business forever.”
[Main image: shubham-dhage-unsplash]
