Blockchain and FinTech – What You Need to Know

Blockchain is the next big thing in FinTech, dominating headlines and industry watercooler talk for some time. But blockchain is more than just hype, and many experts believe that distributed ledger technology will revolutionize advanced FinTech solutions that seemed out of reach just a few years ago. Startups emerge almost daily in the blockchain space, and the industry has the appeal of endless and yet unrealized potential.

Blockchain’s Full Potential Is Still Untapped

Blockchain’s potential was addressed at the 2018 ISITC Europe Conference by keynote speaker Dr. Kay Swinburne, vice-chair of the Economic and Monetary Affairs Committee of the EU Parliament. She noted that blockchain is being adopted quickly around the world, but the industry has only scratched the surface of the technology’s potential, noting blockchain’s ability to deliver unique value to various segments of the financial services industry.

Industry surveys support her belief that blockchain will become even more prevalent in the coming years. It is estimated that nearly 80 percent of companies in the financial services industry plan on adopting blockchain in some form by the year 2020. The sector is seeing exciting partnerships between massive bank and financial systems and young startup companies to speed up innovation and implementation.

Lawmakers Are Scrambling to Keep Up

The law is often several years behind technology, but governments around the world are hoping to keep pace with blockchain. There has been a flurry of legislative activity since 2015, and there have been some notable consequences.

Recently, the Parity ICO Passport Service (PICOPS) announced it was shuttering thanks to the General Data Protection Regulation (GDPR) implementation in Europe. The service validated owners of Ethereum cryptocurrency wallets, and was used by companies rolling out initial coin offerings (ICOs) to ensure investors were legally able to participate. The problem PICOPS ran into involved the storing of personal information on the blockchain. They simply didn’t have the financial or infrastructure resources to achieve compliance.

In the U.S., the federal government has been dragging its feet on matters of cryptocurrency so state governments are taking matters into their own hands, crafting blockchain legislation in rapid pace. The most notable regulations are really PR initiatives. Several states have enacted laws designed to demonstrate they are friendly to blockchain, in an effort to attract startups and high-paying jobs.

Other legislative bodies are working to amend money transfer laws to include blockchain, but the debate around how to proceed is heating up. Some legislators want to see a per transaction tax, while others are opposed to taxing these transactions at all, believing it will hinder innovation, ultimately limiting job opportunities in their states.

Are You Searching for Blockchain Talent?

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