Near-instantaneous payments have long been a dream among crypto enthusiasts, but now those high expectations are trickling into traditional finance, according to one analyst.
On this week's episode of Yahoo Finance Future Focus, BCB Group Chief Product Officer Ashley Pope talks about the near-instantaneous payment speeds that are hallmarks of cryptocurrencies and the potential impact that could have on so-called traditional finance. We talked about sex.
Pope highlighted how blockchain technology is encouraging traditional market players to adapt to meet evolving customer demands.
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“The expectation of near-instantaneous payments in the crypto space is permeating traditional finance, ultimately moving us to a world where value moves at the speed of the internet,” Pope said.
Payment speed: seconds to days
Existing bank transfers range from near-instantaneous on networks such as FPS in the UK and FedNow in the US, to those that take several days to clear on the SWIFT network.
“Near-instant bank transfers are limited to certain countries and suffer from transaction size caps. It may take several days for the payment to be cleared to the actual seller,” Pope said.
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The BCB Group executive added that in contrast to traditional payment methods, blockchains like the Ethereum network take just a few seconds to settle. “These blockchains are available worldwide as long as there is an internet connection, and there are no transaction restrictions. Send $1 Billion USDC Stablecoin (USDC-USD) from Canada to Australia smoothly in less than a minute. is possible,” he added.
To fill this gap, traditional financial institutions are seeking innovative solutions. Visa (V) introduced stablecoin payments for merchants, and JP Morgan (JPM) launched initiatives such as his Onyx, a blockchain-based wholesale payments platform. Additionally, the UK government’s plans to oversee fiat-backed stablecoins signal a broader trend towards adopting cryptocurrency-inspired mechanisms for payments.
“Many traditional financial institutions are now using blockchain technology to reduce transaction times and expand their global trading reach. These include Paypal, Visa and Société Générale, which hold the coin,” Pope told Yahoo Finance UK.
Blochain offers a wide range of payment options
Discussing the options for instant payments that are becoming available, the Pope spoke about stablecoins, native cryptocurrencies such as Bitcoin (BTC-USD) and Litecoin (LTC-USD), the UK's FPS and the UK's SEPA. highlighted the emergence of existing payment rails such as Europe.
Additionally, blockchain providers offer cross-border payment solutions, exemplified by Ripple's on-demand liquidity service.
Regarding the appeal of Ripple and XRP (XRP-USD) to traditional financial institutions, Pope said, “Ripple and the XRP ledger as a means of transferring value is actually very effective.” He emphasized the potential usefulness of this technology for financial institutions seeking efficient cross-border transactions.
UK’s ambitions as a global crypto hub are on the brink
On the regulatory front, the Pope acknowledged that the UK initially lagged behind the EU in regulating cryptocurrencies. However, he noted recent progress towards establishing a clearer framework and said the UK proposed legislation was a step towards providing certainty for market participants.
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However, Pope said concerns remained about the impact of regulatory uncertainty on the UK's ambitions to become a global crypto hub. He warned that without clarity, foreign investment in the UK's cryptocurrency and blockchain sector could move to more regulated jurisdictions in Europe.
BCB Group executives say regulatory certainty has emerged as a key element in ensuring the UK's competitiveness on the global stage as traditional finance integrates cryptocurrency-inspired payments innovations. he pointed out.
Watch: What is Spot Bitcoin ETF and why has it sparked a crypto rally? | Future focus
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