Hire a professional hacker here atTheHackersPro!
TheHackersProTheHackersProTheHackersPro
(Monday - Sunday)
Submit request
TheHackersProTheHackersProTheHackersPro

Blockchain really is the answer to the current banking saga

money01

money01

The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

UBS’ decision to acquire its rival, Credit Suisse, has, of course, shaken up the financial industry once again. It comes a week after the collapse of Silicon Valley Bank (SVB) and Signature Bank in the United States, signaling that the financial situation is far from improving.

This, of course, is also a sign that an upgrade to our financial system is long overdue.

UBS will be paying 3 billion Swiss francs (around $3.2 billion) for the acquisition, which is around 60% less than it’s worth during the market close on Friday. And while this is usually not the case, a law passed by the Swiss government will no longer require the approval of shareholders for the deal to go ahead.

Without a doubt, Credit Suisse has not been the most popular among investors in recent years, reporting major losses in the current financial crisis. In 2022, the bank saw $8 billion in net losses, its largest-ever annual loss. Last week, it disclosed “material weaknesses” following the downfall of SVB and Signature Bank. 

These situations continue to emphasize the need for an upgrade to our financial system, preferably by introducing a transparent approach and auditability to the people who are putting their life savings and retirement funds into what they believe to be a trusted institution.

In terms of traditional finance, the acquisition could further consolidate the banking sector as UBS and Credit Suisse are both major players in the industry. The combined entity would have a larger share of the market, which could result in increased pricing power and potentially reduce competition.

Isn’t it ironic how, in a banking industry that is still mostly powered by technology from the 1960s, we have the technology ready and waiting to be implemented? And while the technology from the 1960s is powerful on its own, it cannot provide a comprehensive answer to the problem of financial system transparency.

But the most important thing is that we do have the means to improve the said downsides of the traditional banking sector that eventually lead to the downfall of major players like SVB and Credit Suisse. 

Blockchain technology is still very much underused by a number of industries even though it has proved to be a great tool in improving the future of where the financial industry is headed.

Essentially, by introducing blockchain technology into the traditional banking sector, we can help the public save billions of dollars per year in fees while also minimizing, or even eliminating, the need for trusting third parties.

Blockchain is an auditable and transparent ledger of transactions and states, eliminating the need for shady bookkeeping practices to create false totals. On a blockchain, money cannot be fabricated, doubled or inflated. Meanwhile, solvency information is available for public scrutiny at any time. 

Moreover, future advancements in blockchain technology, such as zero-knowledge proofs, will allow customers to maintain a necessary level of privacy while also providing full auditability on a scale never seen before in human history.

However, the current financial situation is making older generations, who have already been in similar circumstances, relive past events.

People who held dollars in deposits in 2008 were lied to by bankers. This time around, the liars are now the central bankers, bankers and bank regulators, making it increasingly harder for people to trust the traditional financial system again, unable to regain the points it had recently lost.

Meanwhile, the distrust that rose for the blockchain industry since the current FTX debacle is not entirely fair, as the disaster is unrelated to the core blockchain industry and technology. Sam Bankman-Fried and his actions were the cause of the current crash. He was the one who stole money from his customers. Ironically, this would not have happened if blockchain and decentralization had been in place. FTX is yet another example of a centralized financial system failure, not blockchain.

Technology, any technology, is obviously not easy to implement. But when it comes to blockchain, established institutions are reluctant to use it because they are afraid of the unknown. The US regulatory landscape, including the SEC and CFTC, is making things harder for the mass adoption of blockchain and cryptocurrencies. They refuse to understand that blockchain technology will be better for both people and institutions.

The recent bank failures are hinting at something else. They’re showing everyone that the transformation of the system is more urgent than ever before.

About the author: Jesper Kristensen is the COO of Panoptic. Jesper holds a Phd in applied physics and computer science from Cornell University and has previously led a large web3 research organization. Jesper also co-authored a book on automated market makers: A Practical Guide to Decentralized Exchanges and Cryptocurrency Trading.


Follow Us on Google News

Leave A Comment

Professional hackers for hire at TheHackersPro

(Sat - Thursday)
(10am - 05 pm)

Subscribe to our newsletter

Sign up to receive latest news, updates, promotions, and special offers delivered directly to your inbox.
No, thanks