We will witness the gradual disappearance of traditional banking systems as they refuse to embrace or deal with blockchain technology and all its implications.
Luxembourg must integrate blockchain into its funds to remain relevant in an evolving financial landscape. I have always been fascinated by how fund managers handle our money and generate substantial profits from fees. However, to prove their skill in managing funds, they have started comparing themselves to various indices, making it difficult for customers to keep track. As a blockchain enthusiast, I advocate for transparency in banking operations. With years of experience in financial services and a focus on blockchain technology, we have been developing the world’s first decentralized bank. Our vision revolves around transparency, executing actions through self-executing smart contracts.
Blockchain extends beyond cryptocurrencies, signaling the potential obsolescence of brokerage functions in industries relying on intermediation. A survey by the World Economic Forum (WEF) highlights the urgent need to update financial services, projecting that blockchain will store at least 10% of global GDP by 2025. I firmly believe this figure will be significantly higher. Banks understand the importance of cost-effectiveness while still charging for services, making efficiency and productivity attractive.
Smart contracts is the future of banking
Funds need optimization to process registers, brokerages, and transactions, affecting administrators and trustees who handle 50% of the finances. Blockchain will disrupt industries, and even Luxembourg will not be able to resist its impact. The phenomenon of smart contracts, recorded directly in the ledger without external influence, will eliminate middlemen manually recording transactions. This is one of the most remarkable aspects of blockchain, organizing itself while eliminating unnecessary resources and the risk of human errors.
Smart banks, such as JP Morgan, have long embraced cryptocurrencies and recognized their value in speeding up transactions and transfers. The technology could replace processes like KYC (Knowing Your Customer) and AML (Anti Money Laundering) procedures, enhancing efficiency and reducing costs. Imagine a platform that allows instant cashing in of shares or fund units, completely revolutionizing the process and rendering middlemen and other functions obsolete. Could fund companies evolve into managers of digital wallets or replace custodian banks?
Luxembourg, as the leading European financial center and a major player globally, has the opportunity to leverage blockchain technology. Automating processes and eliminating intermediaries in fund distribution and transactions can significantly enhance speed, efficiency, and cost-effectiveness. However, this could also pose a threat to the Luxembourg economy, as automation may impact job opportunities in the fund industry. Nevertheless, we remain optimistic as we embark on our journey to revolutionizing yet another industry. Stay tuned for the future of banking.