Five years ago, US banks approached companies providing blockchain solutions to use a common network for cross-border payments. Several of them ended up withdrawing from the project to avoid sharing their customers’ data with their competitors. The lack of a digital dollar to ensure the transfer of funds from one bank to another was also a major point of contention. A few years later, they are now ready to test a solution that will revolutionize banking services around the world. Explanations.
A blockchain adapted to the needs of banks
What has fundamentally changed over the past five years is that the know-how in distributed ledgers has adapted to the needs of banks. Blockchain developers have come up with a method that allows each banking institution to use its personal distributed ledger model and link to that of others. The solution enabled the financial institution Signature and the Start-up Tassat to build a blockchain-type fund platform. Not long ago, Tassat announced plans to launch a digital interbank community called Tassat Pay early next year.
It will bring together the blockchains of certain banks and allow them to transfer funds between their respective customers. Several banks and financial institutions have already committed to using this new platform. ” We are in the process of creating an ecosystem of partner financial institutions who wish to participate in this community in the coming months. Said Ron Totaro, CEO of Tassat. Tassat’s network is based on an authorized private fork of the Ethereum blockchain. Its tokens are sensitive ERC-20 type contracts that act like stablecoins. The resulting platform is superimposed on the current central banking system of a financial institution.
The arrival of stablecoins changes everything
Improving know-how in blockchain-type solutions that are more acceptable to banks is not the only factor that made it possible to launch this platform. Indeed, the development of the cryptocurrency market has been marked in recent years by the explosion of stablecoins. Their appearance made it possible to provide banks digital assets with secure values attached to the dollar.
” For many transactions, if people are not speculating in a digital forex market, they are sticking to US dollars ”, Declared in particular Dale Gibbons, CFO of the financial institution Western Alliance which joined the platform of Tassat. He also added that the use of stablecoins allowsavoid currency conversions or trading fees.
Tassat’s initiative proves that the use of blockchain-type solutions is gradually being accepted in the banking world. The adaptation of these to the needs of institutions in the sector and the use of a cryptocurrency pegged to the US dollar will have been decisive in facilitating this reconciliation.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 in some crypto only increased my enthusiasm. I therefore resolved to study and understand blockchain and its many uses and to relay information relating to this ecosystem with my pen.