Truly Trading: How Blockchain Tech Could Transform Forex Trading

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We’ve all heard of Bitcoin. It’s come to the point where many out there will roll their eyes when they see yet another Bitcoin revolution’ headline, so relax, this isn’t one of those. What many out there might not have taken a closer look at is how the technology that made Bitcoin possible – blockchain technology – may change the way we do things.

There are numerous, perhaps countless, applications that can be thought out when it comes to blockchain technology, and these are by no means limited to the financial and crypto-currency markets. Should you be asked to identify an area that will be hardest hit and transformed by the potential of blockchain technology, we would have to with the financial services industry, forex trading especially.

What’s the Situation Today?

As things stand at the moment, financial institutions spend countless working hours in the effort to build relationships with their clients – both existing and prospective ones. It’s a necessary part of the process, whereby the bank may only relax a bit when the client chooses to sign the dotted line and commit their custom to the bank.

This is only a taste of more tedious detailing to come. KYC (Know Your Customer) regulations make it a requirement by lay that financial institutions take all reasonable efforts to ensure that their clients are not making use of their services to make, channel, or otherwise hide illegal funds. As you may imagine, in the age of complex transactions taking place across the face of the earth, coupled with the proliferation of criminal enterprises and terrorist channels, this becomes a herculean task. The banks, big as they are, have a tough job cut out for them in current conditions. The process of attaining a satisfactory KYC threshold is taxing on institutions and clients both.

How Blockchain Comes In

Those who paid attention through all those Bitcoin articles will definitely have heard of a secure ledger. This is what made it possible for cryptocurrencies such as Bitcoin to boast of virtually unalterable transaction histories. It’s what gave the currencies their reputation of being fraud-proof’, as the records of transactions recorded on the ledger could not be altered by any single entity – the record is stored by all machines across the network, that spans hundreds of thousands of unique computers.

Where this feature comes in handy here is in the way secure ledgers, made possible by blockchain technology, could be used to store the records of clients in a way that makes it possible for banks to put their faith in whatever information is presented there. It would eliminate the need for every bank to start getting to know you from the ground up should you have a bit of business to conduct with them. It will be a universally acceptable credential reference and statement of credibility, such as isn’t to be had anywhere with current industry methods and technologies.

Credit lines could be established with a few clicks of a button, as the ledger would be readily available for review and validation at all times. You will have significantly reduced the bank’s workload in terms of all the legal, operational, and compliance-related functions. The possibilities don’t stop there. Imagine a scenario where you haven’t exhausted the limits of your line of credit with one institution – you could very easily have your line considered for a separate loan facility to the tune of your unused credit leeway with another institution entirely.

Well, What About Forex Trading?

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Now, where forex traders may come to feel the impact of blockchain in their operations is when it comes to the unification and transparency of their trading activities. For the longest time, these have remained somewhat hard to see through and decipher, even for professional traders. This is what has kept many a would-be trader from diving in.

Could you imagine a single, reliable, unquestionable counter that could list for you the btc/usd vs eth/usd ratios as they stand in real-time should you wish to engage in some arbitration? It would be a game changer, as traders have to work more-or-less in the dark. Prices change every second when it comes to cryptocurrency-forex trades, and blockchain may provide the only viable method of unification we’ve come across.

The introduction of truly decentralized forex trading would allow every trader, from the home-based day trader to the multi-national trading firms, to finally pay on a level field when it came to price transparency. The magnitude of such a shift in the dynamics of trading can hardly be underestimated.

About Shital 180 Articles
Shital regularly contributes on current health articles and healthy living ideas to health blogs around the web. When she’s not busy working with the jobs, you will find her undertaking many of her own health-related topics and healthy living ideas! She has a lot of dreams. She works hard to fulfill her dreams. She loves to share her ideas, tricks, tips and information by blogging. She also works at Creativejasmin.com, a company that committed to helping businesses with online marketing.

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