Threat of Blockchain and Cryptocurrencies Distant But Inevitable, Suggests Moody’s

Threat of Blockchain and Cryptocurrencies Distant But Inevitable, Suggests Moody’s

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Moody’s Investors Service analyst Stephen Sohn and his team have guaranteed the US payments sector that the threat of Blockchain technology and digital currencies is yet far off, but organizations will ultimately deploy the technology. The team said that Blockchain is a game-changing technology and may pose a challenge to the payments sector in the long run.

In their report “Consumer Digital Payments – US,” Sohn and his team also noted many “tech-enabled entrants” that are disrupting the electronic payments market in the US.

Portion of the report says:

“Providers that are considering adopting Blockchain technology, which was originally created as a platform for the Bitcoin ‘cryptocurrency,’ may pose another potential threat to all of the current payment constituents. Blockchain is a chain of blocks of encrypted information that form a database or ‘ledger,’ which may eventually lessen the need for the intermediary platforms that currently approve, clear, and settle payments.”

Blockchain benefits financial services industry

Meanwhile, Moody’s associate managing director, Sean Jones and his team also published a different report in April saying that Blockchain has numerous potential applications and pros above the leading digital currency Bitcoin.

They said that the technology can disrupt the clearing and settlement sector and it can also “promote transaction transparency, improve data security, and lessen the risk of a single point of failure.”

Nevertheless, Jones and his team highlighted many shortcomings that should be addressed before the economics of investments in the technology can be understood. Among these barriers are the technical concerns related to interoperability and scalability, as well as discrepancies on industry standards and terms of cooperation.

The report also noted the generally helpful stance shown by financial services regulators on Blockchain, but highlighted the lack of definitive view on how the technology will ultimately be dealt with.

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