Dutch Bank ABN AMRO has become one of the first commercial institutions to implement a blockchain solution in fund and transaction management in place of escrow. While announcing the new business development, the bank admitted that the future of finance is cryptocurrencies and the blockchain technology to facilitate peer-to-peer anonymous but secure transactions.
In implementing blockchain accounts, ABN AMRO hopes to find a permanent solution to transparency, high costs, and security of managing and transferring funds. Account holders, or the bank’s customers, will get client accounts already configured with blockchain that grows as funds flow between the clients and organizations.
ABN AMRO Clearing Bank Partners With Nxchange
ABN AMRO Clearing Bank has partnered with Nxchange to drive the development of blockchain-integrated accounts. These accounts are designed for efficiency, transparency, and affordability. The pilot project will focus on checking and assessing the functionality of the blockchain system and to make any necessary improvements in the public beta.
Amsterdam-based Nxchange is a white-label digital stock exchange where financial institutions and companies trade bonds and equity. The company is developing the blockchain solution as a service that aims to ensure every individual in banking and non-banking institutions get AACB blockchain accounts. According to the developers, payments between individuals and institutions will be transferred under public supervision, ensuring transparency and security of the funds and data.
Benefits Of Blockchain Accounts Over Escrow
Escrow is ancient technology that was introduced during the times of postal mail orders. With the rise of the e-commerce, escrow survived as a way to secure payment made from one individual to another and ensure both parties meet their obligations. The problem with escrow is that it introduces a third-party who drives up the cost of transactions and reduces the security of the operation.
The blockchain accounts that ABN AMRO is introducing into the banking industry are designed and built to cut the administrative costs of managing and transferring funds drastically. This is achieved by eliminating the third-party escrow and associated costs.
Blockchain also helps the financial institution to quickly and affordably trade in equity and even exchange bonds anonymously but securely. ABN AMRO is striving to be the first Clearing Bank to launch a system that will allow institutions and companies to collect their capital right from their websites and to offer investors a safe and unregulated environment to trade.
Why Blockchain Accounts Are The Future Of Finance
Promising market interest: Blockchain-linked bank accounts are an innovation that is yet to be tested. Since it is guaranteed to work, this business model will bring significant market interests because of cheaper transaction costs.
Simplified investing: The company that conceptualized the blockchain bank account, Nxchange, is a next-generation business with a track history of developing banking solutions simplified for the average user. The new blockchain accounts will be cheaper and simpler to use than escrow accounts, hence will be more attractive to online and traditional traders.