Banks take the next step
The financial sector is on the brink of a technological evolution, led by blockchain-technology. During SmartCon where the biggest names in banking attended (ING, JPMorgan, Six Digital Bank, Google), it became clear that interest in blockchain and the potential for innovation is only growing. In this blog, we explore key discussion points and insights from the event on private chains (private blockchain networks), interoperability (the ability of systems to communicate and work with each other) and the future of banking with Central Bank Digital Currencies (CBDCs – digital currencies issued by central banks).
Privately managed blockchains
Most (major) banks want Web3 enter by developing their own managed blockchain; they don’t see much point in one common “mega-blockchain.” A team from Swift and some of these banks stresses that these blockchains must be able to communicate seamlessly with each other. The Cross Chain Interoperability Protocol (CCIP) seems to be an excellent solution for this. It is crucial that this integrate seamlessly with Swift, the current standard for international payments. Encouraging tests have already been conducted by CCIP and Swift. The idea is more toward improving the existing system than a complete revolution. We certainly expect more collaborative initiatives in this direction.
Major financial institutions developing Web3 solutions
CBDCs and the Future of Banking
The rise of Central Bank Digital Currencies (CBDCs) is a game-changing development for private banks. Speaking with the Digital Officer of Credit Agricole S.A., it became clear that CBDCs pose a threat to the traditional banking sector. Central banks plan to introduce their own “wallet” systems (digital wallets for storing digital assets), where individuals can initially deposit up to €3,000. While this is intended to reduce the impact on private banks, given the potential scale of participation, it could pose a significant challenge to them. The Digital Officer outlined a timeline in which the CBDC system would be ready for use by banks by 2027 and by citizens by 2030. This underscores the urgency for private banks to innovate and adapt their services to the digital age.
Swift explains how they are guiding 11,000 companies to blockchain
SmartCon made it clear that blockchain technology will have a significant impact on the financial sector. While banks such as ING and JPMorgan are considering developing their own managed blockchains, interoperability is a core focus, with the Cross Chain Interoperability Protocol (CCIP) already being tested for seamless integration with SWIFT. Moreover, the rise of Central Bank Digital Currencies (CBDCs) and their potential to disrupt traditional banking signal an urgent need for private banks to innovate. With CBDCs potentially widely available to citizens by 2030, private banks face the challenge of modernizing their services for the digital age.
During our time in Barcelona, we gained many new insights and developments. Below you can read the two previous parts that you definitely don’t want to miss.
Part 1: Read HERE about the experience at the Hackerhouse at Barcelona.
Part 2: Read HERE how a giant like Google has increased the synergy between Web3 and AI in the spotlight.