According to FinTech Adoption Index 2017 study, of 22 000 people interviewed in 20 countries, 50% use FinTech services for making payments and transfers, while 65% are going to use FinTech services in the future. As the world becomes more globalized, the demand for digital money will increase. In fact, as smartphone gain popularity in developed countries, and expansion in developing countries, permits peer-to-peer lending blockchain platforms to offer services of full platform of banking.
Banking in Blockchain.
Digital banking popularity will grow as FinTech companies continue to innovate. Meanwhile, more people are turning to digital banking services for comfort, speed and safety offered. Not only does digital banking offer additional advantages to users, but also set standard requirements that revolutionize client-bank relations.
As a result, one direction that could define the future of digital bank services is banking based on blockchain technologies. Blockchain technology is disrupting the Fintech industry because the technology is faster, more efficient and less fallible than traditional automatic clearing house (ACH). For instance, smart contracts, one of the most interesting elements of blockchain technology, facilitate users to exchange money, securities, and other assets, within the safe confines of the blockchain. Moreover, these fund transfers occur in a non-conflict manner. In other words, a smart contract operates as a traditional contract, only automatically, with rules and penalties for its performance.
As a result, the Blockchain lending platform can provide users from across the world with banking services remotely. This multifunctional platform of banking service would combine digital and traditional currencies. Thus creating a hybrid system which uses digital currencies for faster and cheaper executions. At the same time, fiat currencies, such as the U.S. Dollar, will guarantee all-around acceptance and validity. Moreover, some Blockchain lending companies offer client one account for both types of currencies.
The benefits of lending on the blockchain.
The number of crypto-lenders who offer banking services will increase. Implementing blockchain technology will enable the fully digital bank, to be accessible to users from all over the world. Furthermore, the blockchain lending platform will function as a typical bank. However, the crypto-lending platform will operate without departments, and a front-office, fully relying on new digital technologies. In spite of this, the crypto-lender will be able to operate in a cost-efficient manner.
On the contrary, peer-to-peer lending too will allow network participants to place pledged assets on the blockchain. Hence, an immutable record for each asset’s attributes. All the users in the network, including lenders, investors, servicers, auditors, and analytics firms, among others, will rely on a single distributed, decentralized record.
However, blockchain lending has a number of hurdles to overcome before it can become dominant. For example, the world falls into two camps: supporting cryptocurrencies those who don’t support cryptocurrencies. As it stands, banking institutions are sabotage the process of implementing cryptocurrencies in everyday life.