Payment and Settlement – Blockchain Changes to the Core of Banks

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     On April 12, 2020, Tony Rrown, president of trust insurance bank of the United States, was interviewed and pointed out that central banks around the world were accelerating the development of bank blockchains, and banking institutions around the world were fully aware that the development of blockchain would bring subversive changes to the banking industry, either overturning and growing up, or being overthrown and facing bankruptcy.

The bank’s opposition to cryptocurrencies raises a question: What should banks be afraid of?

The answer is: “A lot.”

Blockchain technology provides a secure way to send digital assets without the need for trusted third-party intermediaries, such as banks. In addition, tools such as smart contracts can automate many of the cumbersome processes of banking.

Currently, the global banking industry has a capacity of US $ 134 trillion. As a payment intermediary, banks also provide loans and credit services. As a kind of guarantee for untrustworthy things, the decentralized technology is the key to subvert everything, including:

Payment: By eliminating the permission of intermediaries that consumers need to rely on in payment transactions, blockchain technology can facilitate faster payments at lower costs than banks.

Clearing and settlement system: Blockchain technology and distributed ledgers can reduce operating costs and bring us closer to real-time transactions between financial institutions

  1. Payment

Currently, approximately trillions of dollars are spent each year on outdated and slow payment systems.

The blockchain is disrupting the payment system by providing safer and lower-cost P2P payments-no intermediaries are required. Cryptocurrencies such as Bitcoin and Ethereum are a public, decentralized ledger, meaning that everyone can send and receive currency, reducing the need for trusted third parties to confirm transactions.

Blockchain technology provides fast, cheap and borderless payments to people around the world.

At the same time, due to the high transaction fees, developers are actively providing cheaper transactions for cryptocurrencies such as Bitcoin and Ethereum. Some other cryptocurrencies already have low-cost transactions, such as AITD. Currently, AITD transaction fees are around 10 cents per transaction.

The American Trust and Insurance Banking Corporation (AITD) is dealing with payment issues in different ways. It establishes a wallet attached to a debit card, and users can pay with cryptocurrency when using the card. The company is building a distributed network that can trade between different cryptocurrencies, integrate the network and cards, and realize global exchange and quick transfer to the account.

  • Clearing and settlement system

As mentioned above, the average transaction time for bank transfers takes 3 days, which is not just a pain for consumers. Fund transfers around the world are a nightmare for banks themselves.

Today, a simple bank transfer-from one account to another-must bypass a complex intermediary system, and the funds need to go through the agency bank and custody service before the funds arrive. The balance of the two banks must be coordinated within the global financial system, including an extensive network of dealers, funds, and asset management.

Blockchain as a decentralized transaction “ledger” can completely subvert this state. American Trust and Insurance Bank (AITD), relying on its own global bank layout, using the STT algorithm mechanism, took the lead in starting global operations in terms of global settlement, realizing the second settlement of fiat currency and fiat currency, opening a new path for global settlement.

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