Over the last decade, Blockchain technology has become a major part of the Fintech industry, and the modern banking system is now on the verge of incorporating its innovations into its accounting systems.
Approximately 40 central banks in the financial ecosystem have already taken steps to establish a blockchain platform for their operations, some of them considering issuing digital currencies to the central bank.
Now, according to a recent press release, Dubai International Financial Centre [DIFC] and Mashreq Bank announced the middle east region’s first blockchain sharing platform, that would support licensed enterprises and allow an easy initiation of digital bank accounts. Organizations would be able to open their accounts instantly with the bank with promoting enhance transparency.
DIFC and Mashreq Banks to enable KYC protocols
One of the major focuses of DIFC and Mashreq Bank is to integrate corporate KYC information while holding high standards of customer experience when users are opening their digital accounts.
The introduction of KYC operations suggested that the central institutions were looking forward to storing user data on a decentralized network; thus, third parties may have access to it after the requested permission has been given.
A blockchain-based KYC is also an ideal step forward from the perspective of data security as it abolishes the threat of unauthorized access that often leads to data streaming. Blockchain-based KYC platforms would also enable active surveillance to keep track of day-to-day transaction activity and spot malicious transactions.
At press time, the blockchain platform was live and, according to the report all UAE-based banks and corporations had access to the platform.
After the announcement, Arif Amiri, CEO of DIFC Bank stated,
“As the leading financial center in the MEASA region, we take great pride in continuously enhancing and evolving the DIFC ecosystem in order to provide a world-class environment for our partners and community to conduct business. As we enter a new period of growth and expansion, our core focus on FinTech and blockchain are major steps on our journey towards transforming the future of finance.”
Major Banks entering the Blockchain space
Central banks are no longer in a position to prevent the emergence of the blockchain and the resulting rise of digital assets. Although not all banks were considering the integration of blockchain in order to compete with decentralized assets, some major banks were experimenting with the technology of issuing CBDC.
Central institutions around the world have been researching and setting up a task force to understand the functionality of the digital dollar and the use of blockchain technology. The financial ecosystem is moving into a digitized space at a fast rate and Libra’s proposed announcement for a stablecoin backed with the U.S dollar turned several heads in the space.
The discussions over a CBDC picked up pace after China’s People Bank of China voiced its support for blockchain in 2019. As a result, other banks followed suit as well, as recently Bank of England, Bank of Japan, European Central Bank, Bank of Canada and Sweden’s Central Bank banded together to initiate their own research about central bank digital currencies.
The financial and technological space has risen to the benefits of blockchain in the past decade, and over the next 10 years, the development with regards to this technology will probably facilitate involvement in various industries around the globe.