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Blockchain on its way to world domination

08 Apr 2019   #Bitcoin

Since its inception in 2009, distributed ledger technology has come a long way. What started as a way to seal smart contracts evolved into the world's first cryptocurrency. Bitcoin, a quirk at the time, wasn't given much attention except in very niche circles.

Today a Bitcoin is worth $5000 and counting. At its peak, it was worth $17000. The entire world was infected with cryptocurrency mania only to see it fall flat and drop astonishingly quickly. The average Joe quickly forgot about it but something has happened in the meantime.

Blockchain technology has risen incredibly quickly since the Bitcoin bubble burst. New forms of distributed ledger platforms have been launched. Old and new companies alike are using blockchain to solve problems in a wide variety of business sectors. This is shown best by Pricewaterhouse Cooper, one of the leading auditing firms in the world. In a survey done last year, 84% of the executive said their companies were using blockchain in some or other way. The problem, they noted, was one of trust. More precisely, 45% of the respondents said that their main concern at the current time was the issue of trust among users of the technology.

This issue is, according to PwC, what is stopping blockchain from becoming a dominant technology that is widespread in many countries. Regulation would go a long way to ensuring enough trust is built up between suppliers of blockchain services and consumers of said services.

Light at the end of the tunnel

There is light at the end of the tunnel though. It might even be surprisingly close. In June, industry leaders have speculated that the G20 finance ministers will adopt a joint regulatory framework that deals with cryptocurrencies. Cryptocurrencies are built on blockchain technology. This leads many int he industry to believe that many of the issues facing blockchain will be cleared up then.

It would also send a strong signal to the rest of the world that cryptocurrencies are here to stay, and that they are accepted. Speaking from a regulatory perspective, of course. There is also the highlight of blockchain use in banking. France's own Bank of France has created a blockchain based system to regulate and automate SCIs for all EU members.

Another leading light for blockchain technology is Malta. It has already created a framework for blockchain to be properly regulated. This move has earned it the moniker of "Blockchain Island". Germany, on the other hand, is a lot more conservative with its approach. The Germans believe that blockchain will only be useful if there is an extensive period of consultation involving all stakeholders.

Whatever the method used, more and more governing bodies are looking to blockchain to solves problems. Those governing bodies might be central banks, who are looking for a better, easier and faster cross-border money transfer system. It could be the central banks again, as is the case in South Africa, where blockchain could be used as a more efficient tool for inter-bank transfers.

FATF pushing regulators

The FATF is pushing regulators to deal with cryptocurrencies in a way that will allow the technology to be used quickly. FATF policy is to combat terrorist funding and money laundering. Once steps have been put in place to regulate those aspects, blockchain will record explosive growth.

Author: Ali Raza. Article For:

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