Not too long ago, central banks, commercial banks, investment banks, and regulators all considered Blockchain technology /cryptocurrency, and their approach to decentralization of operations, unqualified to make a lasting mark on the world’s financial system. Digital currencies were not only considered unfit to be a part of the world’s financial system, they were also considered a means for the perpetration of fraudulent activities. It was and is still believed by some of the financial heavyweights of the world, Warren Buffet inclusive, that cryptocurrencies were/are going to end up very badly.
Well, we are just six months into the year, and many financial institutions such as investment banks and commercial banks that strongly opposed digital currencies and the Blockchain technology are beginning to take a different stand. So many firms (financial and non-financial) that once strongly opposed the concept of cryptocurrency and Blockchain technology are now beginning to reconsider their stands. A lot of them have now become actively involved in Blockchain technology. Although the reasons for this are not so pronounced, it is probably as a result of the decentralization characteristics of Blockchain technology.
Why the Sudden Change in the Decision of Financial Institutions
Central banks, as well as other financial institutions that did not believe in cryptocurrency and Blockchain before but have now believed, have not openly given reasons why they now support cryptocurrency. In spite of this, there are speculations that these institutions are now a part of Blockchain investments because they would be left out of the impending financial revolution and hence will be totally out of control if they do not recognize the potential of Blockchain technology now.
Decentralization will Disrupt Status Quo
It is a norm for financial centers to adapt based on the available technology and demand. When electronic communication was introduced, hedge funds relocated to Boston and Mayfair from Wall Street. In very much the same way as hedge funds moved from Wall Street to Boston as a result of electronic communication, the advent of decentralization through Blockchain is believed to be a factor for the disruption of the services that are made available by Tokyo, New York, and London.
Decentralization is the Nitty-Gritty of Blockchain
The real essence of Blockchain is based on decentralization; this gives everyone the much-needed privacy in the area of finances. Although for a lot of people, it ends here. However, there is a lot more to this. The privacy that is provided by decentralization has made Blockchain technology of very high demand. With this, individuals can have more control over their investments and financial transaction without the intrusion of any superior financial body.