The financial technology (fintech) industry has seen a significant boost in terms of innovations. The most important technology is considered to be blockchain. However, some community players doubt that this tech is actually the saturation point of fintech.
When considering blockchain tech only in terms of Bitcoin and other cryptocurrencies, it becomes obvious that cryptocurrency has played a big role in providing digital payment solutions. Now, it allows users to make purchases of goods and services in different markets across the globe. However, price volatility makes crypto more suitable for investment or storing value.
Additionally, ever since cryptocurrency came into existence (since 2009 when Bitcoin (BTC) was invented), the innovation has been seen to be carrying a very little value to the fintech space, besides being used to carry out faster, transparent and secure transactions.
When blockchain is separated from cryptocurrency, the technology looks like any other ordinary innovation. It has brought decentralization to finance, where no single person can control or manipulate the register. Besides, the tech ensures enhanced security and unprecedented transparency, which is very important for fintech in general. Briefly speaking, blockchain represents a good solution for all cases where data recording and storing is needed.
However, there is a certain tension from the part of governments and regulators, as well as traditional financial institutions that prefer more centralized models. Besides, cryptocurrency and therefore its underlying tech gets often involved in illegal activity as well as scam projects. That is why some countries have even banned the tech. Combined with the lack of awareness, such reputation can make people think blockchain is a scam itself.
Nevertheless, there is still high demand for fintech products, and fast transactions in this era of digital economy – both by the sellers and the buyers, customers and producers. For the fintech industry to grow further, it needs an innovation that works exactly like blockchain technology without BTC and other digital currencies.
Real DLT-based transformation of fintech, is still many miles away. This is due to the fact that blockchain isn’t a ‘disruptive’ tool, that can attack a traditional business model with an economical solution and overhaul existing companies swiftly. Blockchain or DLT is a ‘foundational’ tool or fintech industry, since it has the grip to build strong foundations for our financial systems. Its impact will be revolutionary and mammoth, but still, it will take spans of ages for it to percolate into the entire fintech infrastructure.