Upcoming digital protocols have great potential to change payments forever.As the years roll and the developments kick in, the industry experts believe that one day we can see digital currency protocols become one with digital banking and digital identities.This was the topic of discussion at a day-long meeting that was arranged by the American journal “Foreign Affairs” at the Council on Foreign Relations townhouse in New York.Three expert panels featured in the event.
They voiced their opinions in front of a congregation of bank and tech experts and enthusiasts.Anne Shere Wallwork is an experienced counsellor for strategic policy at the US Department of the Treasury.She claimed that her organization is open to the idea of financial innovation and increased efficiency in money transfers so that more people can be brought under the fold of the financial system.With that being said, she believes that companies in the ecosystem have to abide by certain rules and regulations that will be devised to prevent exploitation and extremism.As for now, there is not a dire necessity for regulations to be placed on Bitcoin or Ripple protocols. However, anti-money laundering and counter terrorist financing need to be put in motion.
As a result, certain forms of protections have to be strategically positioned in the system.She believes that the organization and the involved companies will have difficulty in setting standards that will be anonymously agreed upon.“The Bank for International Settlements is concerned with all of these issues that, in this country, are dealt with more on a state-by-state basis,” Wallwork said.“But, I think that probably there will be some push if this industry is to obtain trust and obtain greater traction and legitimacy. How are they going to meet those requirements?”Till today, cross border payments have posed a challenge for many companies.
It is described as slow and costly.Despite the widespread implementation of digital banking, transferring money internationally still requires the recipient to have direct access to bank branch.According to Karren Gifford, who is the Chief Compliance Officer at Ripple Labs and has had 8 years of experience as a member of the New York Fed, says that the banks which are smaller in stature don’t really have direct connections with the elite global financial system.In her words, “Accessing that network [of banks] is expensive.
It can cost $1m just to set up a correspondent account to have access to the global financial system with one of these correspondent banks.”New and upcoming technologies like Ripple protocol offer realistic solutions to the problem in her opinion. The banks on the other hands tend to just stir up the competition instead of getting to the root of the problem. A sectioned off regulatory system could disable the beneficial effects of the new technologies temporarily.She says, “Payments are the backbone of the financial system.
We have a national economy. The idea that we are going to create a fragmented payments system by state just makes me sad.”In her firm belief, America should act as one, unbridled economy for a Federal Country.
