Moody’s Investors Service analyst Stephen Sohn and his team have reassured the US payments sector that the threat of Blockchain technology and digital currencies is still distant, but businesses will eventually adopt the technology. The team claimed that Blockchain is a disruptive technology and may compete against the payments sector in the long-term.
In their report “Consumer Digital Payments – US,” Sohn and his team also highlighted several “tech-enabled entrants” that are revolutionizing the electronic payments market in the US.
Part of the report reads:
“Providers that are considering adopting Blockchain technology, which was originally created as a platform for the Bitcoin ‘cryptocurrency,’ may pose another potential threat to all of the current payment constituents. Blockchain is a chain of blocks of encrypted information that form a database or ‘ledger,’ which may eventually lessen the need for the intermediary platforms that currently approve, clear, and settle payments.”
Blockchain benefits financial services industry
Meanwhile, Moody’s associate managing director, Sean Jones and his team also released a separate report in April claiming that Blockchain has several possible applications and benefits beyond the leading digital currency Bitcoin.
They said that the technology can revolutionize the clearing and settlement sector and it can also “promote transaction transparency, improve data security, and lessen the risk of a single point of failure.”
However, Jones and his team cited several obstacles that should be resolved before the economics of investments in the technology can be realized. Among these hurdles are the technical issues related to interoperability and scalability, as well as disagreements on industry standards and terms of collaboration.
The report also highlighted the generally supportive stance shown by financial services regulators on Blockchain, but cited the lack of definitive view on how the technology will eventually be treated.
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