BBVA, a multinational Spanish banking group has published another report on the block chain technology entitled “Blockchain Technology: The Ultimate Disruption in the Financial System,” to explicate the advantages and unique applications of the block chain technology.
Specifically, BBVA highlighted the block chain’s capability of storing identities and unforgeable data and its ability to settle secure transactions instantly.
“In the financial industry, institutions were slow to recognize the potential of blockchain technology; however, dozens of large banks have now invested significant amounts of money in this technology. The attention is likely the result of how disruptive this technology is to the financial sector, particularly if it allows massive simplification of banking processes and significantly reduces costs,” explained Nathaniel Karp of BBVA.
Today, billions of dollars are spent annually to maintain laborsome centralized transaction settlement / banking systems. Most large transactions are approved manually by bank employees, which often stalls millions of payments worldwide for 2 – 3 days, resulting a global straggle of unsettled transactions and bank wired payments.
While the irreversible nature of bitcoin transactions is recognized as a “disadvantage” for credit-card focused banks and financial institutions, the implementation of bitcoin’s block chain technology in current traditional banking systems could save billions of dollars annually, especially for large banks and institutions like BBVA.
BBVA seems to be more interested in the storage like application of the block chain, which enables anyone on the network to attach bonds, equities, derivates, loans and smart contracts on macro transactions. BBVA believes that such feature will replace centralized structures and systems as latest innovations have enabled bitcoin users to trade assets on the bitcoin block chain.
Karp stated, “However, the biggest potential impact of a public ledger may extend beyond the payment system. Given that the majority of financial assets such as bonds, equities, derivatives and loans are already electronic it may be possible that someday the entire system is replaced by a decentralized structure. In fact, the latest innovations are using tokens to store and trade assets like shares, bonds, cars, houses and commodities.”
The bank has been engaged with many bitcoin meet ups, conference and startups over the last few months. In a recent interview with Cointelegraph, Jose Rodriguez, Vice President of payments at Mexican bitcoin exchange Bitso said, “I’m surprised at how friendly, open and interested [BBVA is] in this technology. I’ve met them at events all over Mexico. They like it and they are really updated as to what we and their investments are doing. I’m surprised at how friendly, open and interested they’re in this technology. They even offered us the BBVA center at some new offices they’re about to open, to host this December’s bitconf.”