| ANDRÉS KÜHNEL
The global financial sector is on the cusp of a historic transformation, driven by the adoption of blockchain technologies and the growing interest in asset tokenisation. This change, accelerated by evolving regulatory frameworks and the recent election of Donald Trump as US president, is redefining how banks and financial institutions approach their relationship with technology.
Trump and his Pro-Crypto Plan
The Trump administration has made clear its interest in making the United States a leader in blockchain technology and decentralised finance. This focus includes encouraging the adoption of digital assets and establishing clear regulations that will boost confidence in the sector. This move not only marks a shift in the global perception of cryptocurrencies, but also highlights the potential of blockchain as a tool to improve efficiency and transparency in financial markets.
The global financial sector is on the brink of a historic transformation, driven by the adoption of blockchain technologies and the growing interest in asset tokenization. This shift, accelerated by evolving regulatory frameworks and the recent election of Donald Trump as President of the United States, is redefining how banks and financial institutions approach their relationship with technology.
Trump and His Pro-Crypto Plan
The Trump administration has made it clear that it aims to position the United States as a leader in blockchain technology and decentralized finance. This approach includes promoting the adoption of digital assets and establishing clear regulations to build trust in the sector. This move not only signals a shift in the global perception of cryptocurrencies but also highlights blockchain's potential as a tool to improve efficiency and transparency in financial markets.
Concrete Use Cases for Financial Institutions
The implementation of blockchain in financial institutions offers specific use cases that directly impact operations and customer experience. Some examples include:
- More Efficient Cross-Border Payments Blockchain-based technologies enable fast cross-border transactions at significantly lower costs than traditional systems. This eliminates the need for intermediaries, reducing settlement times from days to minutes.
- Tokenized Loans and Credits Blockchain allows institutions to issue tokenized credits, enhancing transparency in the process, facilitating access to financing, and reducing loan-associated risks through smart contracts.
- Asset and Securities Management The tokenization of financial assets, such as bonds or investment funds, improves liquidity by enabling trading on global platforms 24/7. It also democratizes access to financial instruments previously reserved for large investors.
- Automated Regulatory Compliance Smart contracts on blockchain can programmatically incorporate KYC/AML compliance rules, ensuring that transactions are auditable and comply with regulations in real-time, reducing legal risks and costs.
- Optimization of Financial Supply Chains Blockchain allows banks and financial institutions to track and verify fund flows in supply chains in real-time, reducing fraud and building trust among stakeholders.
- Cost Reduction in Infrastructure Blockchain can lower operational costs for financial institutions by eliminating intermediaries and automating processes through smart contracts.
- Blockchain-Based Insurance Markets Automated insurance policies and blockchain-based claims management offer faster and more transparent processes, eliminating disputes and unnecessary administrative costs.
Tokenization: The New Pillar of Global Finance
Tokenization, which converts physical assets like real estate or financial instruments into digital tokens tradable on blockchain, is one of the most promising applications of this technology. According to the Argentine Fintech Chamber, the global tokenization market could reach $16 trillion by 2030, representing 10% of the world’s GDP stored on blockchain.
In Argentina, initiatives like the regulatory sandbox aim to pave the way for the adoption of these technologies. This testing environment, supervised by entities such as the CNV and BCRA, allows companies to experiment with tokenization and other financial innovations under a controlled framework, ensuring a balance between innovation and consumer protection.
Why Act Now?
Tokenization and blockchain are no longer futuristic concepts. With the global regularization of these technologies, the time to act is now. Financial institutions must identify their specific needs and collaborate with experts to implement solutions that ensure their relevance and competitiveness in this new ecosystem.
