PAYMENT SOLUTIONS
No system is fail-safe Ultimately , the incident proved that no system being used today could claim to be ‘ unhackable ’. In fact , the spate of recent breaches has even prompted the Bank Of England to state their position on digital currencies and decentralised systems .
Karan Kapoor , Head of Regulatory Change and RegTech at Delta Capita , explains , “ In terms of Central Bank Digital Currency ( CBDC ), the Bank of England has already suggested that a digital pound does not have to be necessarily built on blockchain technology and that more centralised technologies can be used . However , we are seeing many other countries opting to use Distributed Ledger Technology ( DLT ) for the design of their digital currency , such as Sweden ’ s e-Krona that is currently in its pilot stage .”
Kapoor also suggests that the widespread uptake of blockchain is not necessarily guaranteed . He says , “ Whether or not a central bank will adopt DLT / Blockchain technology will partly depend on the level of privacy that they want to provide to users , and partly on the purpose of the digital currency – whether it be for retail or wholesale .”
“ Just as we see in the stock market and domestic centralised banks , zero risk does not exist , but mitigation is the best means to create a safer blockchain for everyone ”
Blockchain in the market
One of the newest yet most popular financial technologies , blockchain is essentially a decentralised ledger of endto-end transactions . It helps users to avoid transaction and data manipulation because it automatically tracks every movement and change .
Blockchain enables :
• Instant payments through process automation , shortening transactional processes to minutes rather than days .
• Reduces costs because its decentralised status means it cuts out the ‘ middleman ’.
• Increases transparency : Transactions can be clearly regulated by financial regulators , and all interactions between transactional parties are recorded .
• Cuts down on risks associated with counterparties due to the instant nature of the transactional technology .
• Audits are simplified due to the constant tracking of the transaction .
Sankar Krishan , EVP and Industry Head at Banking and Capital Markets at Capgemini , agrees and says that the upscaling of security happens according to the demands set by the criminal climate . “ Since digital payments were first introduced , cybersecurity teams and hackers around the world have been fighting against one another , which is only expected to continue . The recent Poly Network hack has arguably exposed vulnerabilities in blockchain security which are now being fixed .”