Bank of america blockchain smart contracts

Bank of America has revealed progress on a blockchain application designed to make it easier for global treasuries to do business with new customers. At a Microsoft event last week, Bank of America's director of trade and supply chain finance, Ann McCormick, showcased a new version of the ethereum-based application, demoing how it automates the process of creating a standby letter of credit. A type of guarantee crucial for creating trust between new business clients, the letters are being encoded on a blockchain as part of the trial with the help of Microsoft Azure's blockchain-as-a-service sandbox. In essence, instead of letters being manually sent between multiple parties, they are being translated into smart contracts on a private version of ethereum blockchain.

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Content:

• Blockchain
• Blockchain and Smart Contracts: Capital’s Latest Attempts to Seize Life on Earth
• Can a Smart Contracts replace my banking system in future ?
• Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it
• How Blockchain Could Disrupt Banking
• Category: Blockchain & Smart Contracts
• How blockchain technology is changing treasury
• Getting smart about smart contracts

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Blockchain

Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website. Summary: In pursuit of economic growth and inflation targets, the heavily indebted world seems unable to raise interest rates or reign in the unprecedented rate of bond purchases.

This money printing has seen a debasement of currency, the US dollar in particular, and also accelerated newsflow and price action of enterprise currencies. Digital currencies are no doubt a hot topic, with Bitcoin dominating the narrative. Citibank recently published a comprehensive report on the adoption of Bitcoin, with other Wall Street banks also publicly declaring demand from clients.

The focus of this blog, however, is not to discuss the virtues or pitfalls of Bitcoin but rather to look at the powerful blockchain technology underpinning these de-centralised networks. In essence, blockchain technology use nodes in a network to reach consensus on a transaction and add it to a publicly distributable ledger in immutable form. The real power of this peer-to-peer network is removing the need for intermediaries — and that means greater efficiency and lower cost.

Perhaps the second best known cryptocurrency, Ethereum, is powered by so-called Smart Contracts, executable programming code that uses traditional asset prices, FX rates or even the weather when settling transactions. It feels like an important inflection point for the world of finance as the disruptors claim a new world order, while vested incumbents talk of bubbles and a lack of utility. Notable incumbents like Paypal and Visa have been among the first to embrace blockchain technologies, and transactions can now be settled in cryptocurrency on their networks.

Mastercard is close behind. It is difficult to quantify the impact de-fi could have on bank or payment company profitability. If we look at some of the indicators on these networks, however, they reveal considerable growth that has the potential to develop into a structural trend. Transactions remain minute in comparison to traditional payment rails but, looking at the volumes on the Ethereum network as one example, they continue to increase rapidly see chart below.

Clearly, cryptocurrencies are experiencing growth — but what does this mean for trad-fi? An element of bank profitability looks vulnerable. With blockchain technology, millions of transactions can be disintermediated for very low cost, in a fraction of the time. These new markets also allow for greater financial inclusion for the unbanked, requiring only a smart phone and ID to participate.

They are more accessible too — open 24 hours a day, 7 days a week. With new markets also comes opportunity.

Goldman Sachs recently announced that they were re-opening their cryptocurrency trading desk. The notable corporate treasury adoption seen in recent months is a good example of this opportunity for revenue, with the likes of Tesla and MicroStrategy adding billions of dollars of Bitcoin to their balance sheets. A number of central banks are exploring the feasibility of launching their own CBDC: their efficiency, transparency and lower costs demonstrate the value proposition of the technology.

China is the first country to have launched its own state-backed digital currency, with a domestic pilot of the e-Yuan underway in several cities ahead of possible wider adoption in It is worth stating that CBDC are designed to work in parallel with the existing trad-fi system, with both having the backing of the state.

Blockchain technology provides a compelling tool for policymakers to unlock some of the inefficiencies within trad-fi. CBDC powered by blockchain technology could allow for instant payments to citizens within days rather than weeks. It has been widely reported that, with pent up demand, a proportion of these stimulus cheques have found their way into financial markets — creating asset, but not real inflation. CBDC can be programmed to optimise how these cheques are spent, ensuring it is spent in line with government policy so as to create the maximum benefit for the economy.

These low-friction efficiencies can be taken to the extreme. CBDC would allow for peer-to-peer networks without the need for intermediary banks.

This is a highly unlikely model for the distribution of CBDC, but it is a possibility worth considering. Blockchain technology has immense potential to revolutionise industry: it has been compared to what the internet did for information sharing, Amazon to commerce and Spotify to music.

With unemployment in the US and Europe still high albeit showing a strong recovery , uncertainty around the re-opening of many going-concerns in the hospitality, retail and leisure sectors remains very real. It is difficult to see wage inflation in the short term with this slack in the labour market, and therefore hard to see central banks taking away the punch pool anytime soon.

Consequently, banks will be unable to raise rates on deposits for some time, and a large proportion of savings products in trad-fi remain relatively unattractive. This continuation of favourable financing conditions will keep fuelling demand for alternative assets, with cryptocurrencies a likely beneficiary. With the likely race to the bottom for cost and efficiency, it is difficult to see consumer banks being able to protect the status quo. Instead, they should embrace this technology and build out services to retail customers, as well as wholesale and prime brokerage markets, or risk losing market share to the disruptors.

My bet is the powerful blockchain networks are here to stay! The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Language Language. About us About us. View all authors. Search Search Submit Close Search. Source: Etherscan. Central Bank Digital Currencies CBDC A number of central banks are exploring the feasibility of launching their own CBDC: their efficiency, transparency and lower costs demonstrate the value proposition of the technology. By Craig Rumbelow. Related posts.

Blockchain and Smart Contracts: Capital’s Latest Attempts to Seize Life on Earth

The Covid pandemic has required more digitized transactions, including those which execute autonomously, unhindered by lockdowns and delays in the supply chain systems. According to IBM:. Each block is connected to the ones before and after it. Transactions are blocked together in an irreversible chain: a blockchain. To speed transactions, a set of rules — called a smart contract — is stored on the blockchain and executed automatically.

Can a Smart Contracts replace my banking system in future ?

We can help facilitate new product development — designing new financial infrastructures and instruments or innovating on incumbent solutions — and assist you with integration into blockchain networks public, private or consortium. Blockchain technology has demonstrated the potential to universally reshape the way business transacts across nearly every industry in the global economy. As the technology and its use cases continue to evolve and progress, blockchain is empowering enterprises to drive greater transparency, traceability and operational efficiency for a multitude of business transactions and contracts. Our mission in the blockchain business at EY is to put in place all the tools, systems and services that will be needed to help companies take advantage of this technology and drive enormous productivity gains as a result. Within financial services, we offer distinct blockchain products and services that conjoin our deep technological expertise with our traditional advisory and financial services experience and domain knowledge. We are enabling and driving change across sectors. We are pro-actively evaluating many of the business ecosystems that can be enabled by blockchain and working with our clients to manage the business transformations made possible by this technology. Some of the areas we have seen particular interest in from the market place include:. From design to delivery, our strategists and engineers work hand-in-hand with clients to guide where, when and how to develop the best blockchain strategy for their businesses.

Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it

The financial services industry is at the cusp of a major transformation, and the aim is to enable transparent, secure, and efficient financial services at a lower cost. It's important to note that apart from startups, many banks have been exploring blockchain in some way or the other. They have set up teams, are doing experiments, investing time and money, and don't want to be left behind. Banks are looking at utilizing the ledger system to enhance the current processes of various financial services.

How Blockchain Could Disrupt Banking

JavaScript is currently disabled. This website is best viewed with JavaScript enabled, interactive content that requires JavaScript will not be available. There is a lot happening in the area of payments and financial market infrastructure that I could speak on today. But as this is my last speech before retiring from the Reserve Bank at the end of the year, I thought I would focus on the development that has generated the most discussion, conversation and debate in the nearly 10 years that I have spent as Head of Payments Policy at the Bank. And that is the emergence of distributed-ledger technology, cryptocurrencies and stablecoins, and the prospective emergence of central bank digital currencies. There have been some fascinating developments in this area.

Category: Blockchain & Smart Contracts

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How blockchain technology is changing treasury

The term decentralized finance DeFi refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way. This article highlights opportunities and potential risks of the DeFi ecosystem. I propose a multi-layered framework to analyze the implicit architecture and the various DeFi building blocks, including token standards, decentralized exchanges, decentralized debt markets, blockchain derivatives, and on-chain asset management protocols.

Getting smart about smart contracts

RELATED VIDEO: Blockchain for Banking Industry (T3SV)

Retail banks have made great strides in developing digital business models, introducing millions of people to mobile banking and becoming expert providers of data-based services. When it comes to blockchain, however, they have remained mostly on the sidelines. Governments, investment banks , and infrastructure providers are experimenting with the technology in the belief that a shared electronic ledger will help them cut costs and increase transparency. Investment banks, for example, envisage a world in which execution, post-trade processing, and settlement are instantaneous, eliminating numerous middle- and back-office processes. They are also focused on the potential for smart contracts to increase automation.

JP Morgan is furthering its foray into blockchain technology with the announcement that it is live testing its latest service, Confirm , an application that validates and confirms account information globally. Financial institutions using this solution will be able to instantly request and receive beneficiary account information before executing any transactions. JP Morgan aims to develop a blockchain network that can be used by banks internationally to execute transactions in real time. Blockchain technology is still in its infancy, but it is already acknowledged as a disruptive technology for financial institutions. JP Morgan is among the companies that see the potential in blockchain, and it is heavily investing in it to become a leader in this space.

In short, blockchain is a public ledger capable of recording the origin, movement and transfer of anything of value. Instead of relying on a central authority i. The ledger technology is most attractive to the financial sector because it solves many problems plaguing the industry today, namely security and efficiency. Here are just a few examples of blockchain in the finance sector doing just that.