Disruption is happening throughout the financial sector due to the permissionless and decentralized nature of blockchain.  With the emergence of blockchain technology comes innovation and opportunity.  The article states that many financial firms are in the beginning stages of formulating plans for the implementation of this technology. A recent study stated that fifteen percent of global bank executives will be implementing block chain technology within the next three years.  Currently, financial institutions have also creating the world’s largest block chain multi-centralized consortium, R3.  R3 has provided the most current and promising results for a future decentralized banking system to date.

The biggest benefit is the ability of blockchain to revolutionize the technology of payment clearing and credit information systems within the banks.  Therefore, the complex payment clearing process is minimal.  Through this digitization and point to point transmission, efficiency is projected to increase.  The following benefits were also given within the article:

  • Establishing data ownership
  • Promote data sharing
  • Removing intermediary clearing firms
  • Establish credit mechanism where trust amount parties lack
  • Reduce manual interventions

The article also elaborates on some of the obstacles of implementing the technology within the banking industry.  Most of the information focuses upon the regulatory issues associated around implementing blockchain technology.  Some of the questions that arose are:

  • When to regulate?
  • How to regulate?
  • Will it hinder the innovation taking place?
  • How to shift from a centralization to a decentralization system?

These are just some of the questions that are being asked throughout industry and government. Therefore, the discussion on how to weigh these factors will continue as the technology evolves and expands.

At the end of the article the author is very adamant on the prospect of integrating blockchain into the banking industry, he firmly believes that the social, regulatory, and ethical issues will eventually be resolved.  However, this remains to be seen.  Therefore, I believe the author is more optimistic about the technology than other researchers.


Guo, Y., & Liang, C. (2016). Blockchain application and outlook in the banking industry. Financial Innovation2(1), 24.