Traditionally, the finance industry has relied on centralised institutions for maintaining and facilitating transactions. These institutes include banks and clearing houses. This long-standing paradigm has been disrupted by the new force of blockchain technology.
Blockchain technology comprises a distributed ledger that allows multiple parties to share it. It records the transactions tamper-proof without the need for intermediaries. Among the several significant changes in the finance sector, blockchain technology has led to an enhancement in security. It has also brought changes such as reduced costs, increased transparency, and immutability or impossible to alter.
Moreover, blockchain offers rapid speed and efficiency to the transaction. This leads to the enhancement of liquidity and reduction in the counterparty risks.
Furthermore, it has disrupted the finance industry with provisions of inclusion. This move empowers millions who were underbanked or unbanked in the world. In this light, this article explores the top six blockchain trends that are currently restructuring the finance industry.
Decentralised Finance (DeFi) revolution
Defi is one of the transformative forces impacting the finance industry. It has created a parallel but trustless ecosystem for lending, borrowing, and trading cryptocurrencies. People can earn interest on DeFi platforms without involving traditional financial intermediaries. This has led to the democratising of financial services. If you are considering a career in fintech, learn blockchain to capitalise on opportunities in this growing sector.
Central Bank Digital Currencies (CBDCs)
Blockchain technology across the globe is exploring the progress of CBDCs. These comprise of digital currencies of a country. It is also called as the fiat money. It redefines the transactions between the government, central banks, and the global financial system.
This will help financial institutes enhance financial inclusion and reduce costs. Learning CBCDs can prove to be a valuable skill for professionals seeking a valuable career in fintech. You will have to learn blockchain to streamline payment systems.
Non-Fungible Tokens (NFTs)
NFTs historically were popular tools used in the art and entertainment industry. However, they have made their way into the finance industry. As tokens, NFTs are representative of ownership of an array of financial assets. These include stocks, real estate, and bonds. The NFTs can be used for assets, including music, virtual real estate, and art. The power of NFT to disrupt the financial industry makes it an attractive career in fintech for finance enthusiasts.
Cross-Border Payments and Remittances
Blockchain technology works on the elimination of intermediaries, and it has the potential to revolutionise cross-border payments. The elimination of the intermediaries results in increased transaction speed, reduced fees, and accessibility. This trend is for you to master by learning blockchain if you aim to make a career in the global payments and remittances sector.
Security Token Offerings (STOs)
STOs are the alternative to security offerings in the traditional financial setup. Here, tokens are representatives owning various assets. These include equity, real estate, or debt. It should be noted that these tokens are under regulatory oversight. However, these are the new-age tools to increase accessibility and liquidity for investors. Those considering a career in fintech involving STO must have an understanding of the regulatory framework.
Supply chain finance and traceability
Blockchain technology is being increasingly used in supply chain finance. It offers the feature of enhanced traceability and transparency. The technology is used to record the movements of goods and financial transactions. These can be further analysed to optimise the supply chains. Proper scrutiny would also help reduce fraud and verify product authenticity. This trend is especially for you if you are learning blockchain and want to work in the manufacturing, logistics, and retail industries.
Summing it up
The transforming power of blockchain technology is essentially reshaping the finance industry. It is equally opening up avenues for exciting opportunities for you to pursue a career in fintech. You may choose to master one of the trends of DeFi, CBDC, NFT, supply chain finance, token offerings, cross-border payments, security, or understanding of the blockchain.
So, to start a career in this evolving landscape in the finance industry, consider learning blockchain technology.
We at Imarticus are offering courses that will help you stay updated on the latest trends. The courses will prepare you for the basics of the blockchain revolution. It will also help you develop the right skills and knowledge to enhance your position in the financial career arena. If you are ready to embark on a career in fintech or looking to augment your existing skills in the domain, learn blockchain. You will stay at the forefront of the financial industry's transformation.
You can also explore our range of readings on blockchain in our blog. Your future in finance awaits.
