World governments see the launch of blockchain-based central bank digital currencies (CBDC) as something that could give them a competitive advantage in global trade. European and Asian central banks are launching digital currencies for payment systems and cross border transactions.
The IMF has also shown support for fiat backed cryptos, that reduce reliance on government issued money. Crypto transactions can be cleared and settled quickly without an intermediary. With cross border payments costs go down due to time savings and by bypassing banking networks.
China, is close to releasing its digital yuan something that, could challenge the USD in international trade. Other countries like the UK, Australia, and Sweden are either planning a currency or researching on how a CBDC could affect financial systems.
JP Morgan Chase was the first major bank to develop a crypto, the JPM Coin, backed by USD accounts held at their bank. Wells Fargo has stated they are planning to do the same to reduce time and fees.
The five areas in which the blockchain is being tested by financial intuitions are:
• Trade financing
• Clearance and settlement
• Cross-border payments
• Anti-money laundering (AML) and know your customer(KYC)
• Insurance claim processing
By their nature cryptos and the blockchain have the advantage of near instantaneous settlements, allowing cross border trade to bypass the Depository Trust and Clearing Corporation(DTCC) in the US and Euroclear in the E.U which handle security settlements. These third parties are a bottle neck that generally take between 3 and 10 days to settle transactions.
Additionally settlement organizations like VisaNet and SWIFT use a single ledger which slows their processing. The decentralized nature of the blockchain allows digital tokens to represent a security or a denomination of a currency that can be transferred, without trust concerns – all this at a rapid pace.
Academia as well as the public sector are working on payment systems, and there are four additional segments interested in crypto technologies:
• Custody- how digital assets are owned, stored and secured
• Interoperable implementations- allowing different block chains to work together
• Scaling blockchain technology with converged artificial intelligence
• Combining AI Blockchain and Internet of Things to fight climate change
As banks move to openly embrace cryptos, it bodes well for cryptos in general. Rules and laws that will govern crypto transactions will be better understood and formulated. This move should be supported by all serious crypto world inhabitants.
GLITZKOIN: Glitzkoin is developed on the Stellar blockchain. The project includes the multifaceted GTN token that currently trades actively on 3 crypto exchanges (Cointiger, Stellarport and Dobitrade). Glitzkoin makes a direct connect to the multibillion dollar diamond industry. The project is promoted by second generation diamond veteran Navneet Goenka, it aims to improve productivity and market scope for the glittering industry. A comprehensive diamond trading platform (DiaEx) is part of the project, it supports both B2B and B2C trade in diamonds. As mentioned above GTN is traded by crypto traders on three exchanges, it is also designated as the mode of payment on DiaEx.