UK’s Monetary Body Says Crypto Is Good For Payment
According to a recent study, digital currencies can complement the conventional financial system. This is because people can use digital currencies to substitute the current settlement system.
The IAMTN (International Association of Money Transfer Networks) carried out the study. According to IAMTN, the blockchain tech powering crypto can eliminate the need for intermediaries in payment.
Additionally, the elimination of these intermediaries will lead to a reduction in cost. The association interviewed major players in the crypto industry.
The aim was to assess the potential of crypto and blockchain to enhance cross-border payments. The stakeholders said crypto and blockchain could change the world of cross-border settlement.
The Need For Blockchain Integration In The Payment System
“The usage of crypto for payment purposes is a good substitute to conventional settlement processes. Crypto has the ability to conduct instant transactions using blockchain technology. Also, there is no need for third parties and the banking system,” the report added.
Particularly, IAMTN said it is imperative now to explore the usage of blockchain tech. This is due to the increased volume of cross-border payments.
Also, there is a reduction in the banking relationship between firms and customers. Unfortunately, it is still not clear how to integrate blockchain tech into remittance services.
Apart from blockchain tech, the IAMTN also takes about new technologies. They include AI (artificial intelligence) and API (application programming interface).
It stated that these technologies could improve international settlements. Furthermore, the study also mentioned challenges hindering the implementation of blockchain technology.
Regulation Is A Hindrance To Blockchain Adoption
As per the report, several companies are trying to integrate blockchain tech into their operations. Unfortunately, their efforts have met with challenges. Among the numerous challenges listed in the report, regulation topped the list.
The regulations in certain regions are stricter than in others. Also, certain regions had no clear regulations guiding the use of innovative technology.
As a result, this has led to confusion and uncertainty. The study added that following regulations is usually challenging and expensive for financial firms.
This difficulty is due to the diverse regulations that are changing globally. Most times, these regulations do not create room for technological advancement.
Other hindrances in the report include literacy, awareness, inadequate accessibility, and trust issue. Therefore, the association called on legislators to quicken the introduction of regulations.
The IAMTN believes regulations would bring more clarity to the sector. However, in recent months, the issue of regulation has gained more ground globally.
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