The Rise of Near Instantaneous Settlements in Traditional Finance: A Crypto Enthusiast’s Dream Turned Reality
The dream of near instantaneous settlements in the world of cryptocurrencies is now becoming a reality in traditional finance, according to BCB Group chief product officer Ashley Pope. In a recent episode of Yahoo Finance Future Focus, Pope discussed how blockchain technology is driving traditional market players to adapt to meet the evolving demands of clients.
Pope highlighted the speed of settlement in the cryptocurrency sphere, which is now influencing traditional finance. While existing bank transfers can take days to settle, blockchain networks like Ethereum can settle transactions in seconds. This shift is prompting traditional financial institutions to explore innovative solutions, such as stablecoin settlements for merchants and blockchain-based platforms for wholesale payments.
In order to bridge the gap between traditional finance and cryptocurrencies, firms like Visa, JP Morgan, and Société Générale are utilizing blockchain technology to decrease transaction times and improve global transactional reach. Additionally, the UK government’s plan to oversee fiat-backed stablecoins signals a broader trend towards embracing crypto-inspired mechanisms for settlement.
Pope also discussed the range of settlement options that blockchain technology is delivering, including stablecoins, native cryptocurrencies like bitcoin and Litecoin, and existing payment rails like FPS in the UK and SEPA in Europe. He highlighted Ripple’s On-Demand Liquidity service as an example of a cross-border payment solution that is gaining traction among traditional financial institutions.
However, regulatory uncertainty remains a concern for the UK’s ambition to become a global crypto hub. While progress has been made in establishing clearer frameworks for crypto regulation, Pope warned that without certainty, foreign investments in the UK’s crypto and blockchain sector may divert to more regulated jurisdictions in Europe. As traditional finance continues to integrate crypto-inspired payment innovations, regulatory clarity will be crucial in ensuring the UK’s competitiveness on the global stage.
