According to a new study, digital cryptocurrencies have the potential to supplement the traditional financial system. This is due to the fact that users can utilize digital currencies to replace the current payment system.
The study was carried out by the IAMTN (International Association of Money Transfer Networks). According to IAMTN, the blockchain technology that powers crypto can eliminate the need for payment middlemen.
Furthermore, the elimination of these intermediaries will result in cost savings. The association conducted interviews with key figures in the cryptocurrency business.
The goal was to evaluate the possibilities of cryptocurrency and blockchain to improve cross-border payments. Crypto and blockchain, according to the stakeholders, have the potential to transform the world of cross-border settlement.
The Importance of Blockchain Integration in Payment Systems
“The use of cryptocurrency for payment purposes is a viable alternative to traditional settlement systems.” Using blockchain technology, cryptocurrency can conduct instant transactions. There is also no need for third parties or the banking system,” the paper continued.
IAMTN, in particular, stated that it is now critical to investigate the use of blockchain technology. This is because the volume of cross-border payments has increased.
In addition, the financial connection between corporations and clients is deteriorating. However, it is currently unclear how blockchain technology can be integrated into remittance services.
Aside from blockchain technology, the IAMTN is interested in technological innovations. AI (artificial intelligence) and API are two examples (application programming interface).
It argued that these technologies have the potential to strengthen international settlements. Additionally, the report noted obstacles to the use of blockchain technology.
Blockchain Adoption Is Hampered by Regulation
According to the research, some organizations are attempting to incorporate blockchain technology into their operations. Sadly, their efforts have been thwarted. Among the several obstacles mentioned in the report, regulation ranked first.
Certain regions have harsher laws than others. Furthermore, several places lacked clear legislation governing the usage of novel technology.
As a result, there is a great deal of confusion and uncertainty. According to the survey, obeying rules is typically difficult and costly for financial organizations.
This challenge stems from the numerous restrictions that are always changing around the world. Most of the time, these laws do not allow for technological development.
Other issues raised in the paper include education, awareness, insufficient accessibility, and a lack of trust. As a result, the group urged legislators to expedite the implementation of regulations.
The IAMTN feels that regulations would help to clarify the sector. Nevertheless, the subject of regulation has gained traction worldwide in recent months.