The interaction of the blockchain and IIN

Blockchain technology has a great impact on "Interbank information network", or IIN that optimizes the process of transferring international payments, reducing the number of stages and, accordingly, the time of delivery of funds.

IIN is trying to compete with SWIFT with its initiative "SWIFT GPI" (SWIFT international payment innovation), which uses a software application interface (API) that gives banks access to each other's data and validates payment information before sending payment.

According to the experts, blockchain technology is most useful in the field of finance and trade.

Also, according to experts in financial technologies, the strongest effect from the blockchain can be expected in the nearest future. At the moment, the technology will be actively used in trade and financial activities.

Recently financial experts have also presented a report stating that blockchain and digitalization could potentially bring many benefits to banks and financial institutions. According to this report, while cryptocurrencies attract the most attention, the underlying technology is actually more important.

According to last year's statistics, during 2018 it made more than three million blockchain transactions totaling $250 billion. We may conclude that one of the main advantages of transactions on the blockchain is the lack of need for external confirmation.

Advantages of the blockchain

The principle of operation of the blockchain is to create distributed databases, full copies of which are stored by the participants of the transaction or other process and serve to verify the correctness of the information. In such a system, none of the participants will be able to change the information, because the substitution will be disclosed when compared with other copies. Advantages of blockchain-based solutions:

ensuring the integrity and consistency of data stored by distributed network participants simplifies data reconciliation and error control;

lack of centralization in data storage and, as a consequence, a single point of failure, increases the reliability of data storage and processing, ensuring the recovery of information even in case of extensive failures;

immutability of data can significantly reduce the risk of fraud and unauthorized changes to the data;

the absence of trusted third parties reduces time and financial costs when conducting contractual and other types of document flow with counterparties.

Moreover, smart contracts include the logic of contract execution, providing automatic/semi-automatic control over the performance of obligations, especially in conjunction with solutions in the field of the Internet of things. To ensure greater security, there are also non-fungible tokens (NFTs) which is a unique, non-replicable digital certificate that proves ownership of any digital asset.

The Blockchain and Forex

Cryptocurrencies are the money of the future, which not only allows you to get out of control of the state and the traditional participants of the financial system-banks first of all but also to maintain complete anonymity, as well as to obtain security in transactions, which has never been before.

A broker on the blockchain platform implies the use of open-source smart contracts. They will carry out all settlements between the client and the broker, the broker, and the liquidity provider, which guarantees their transparency and reliability. The blockchain platform significantly reduces the cost of the Forex industry, which is inevitable when operating classic currencies. Blockchain technology is absolutely transparent, everyone can see what, where, how, and everything in real-time. Smart contracts make it impossible for the broker to cancel profitable transactions, or replace them with unprofitable ones.

With the advent of blockchain on the Forex market, investors and traders will be able to take advantage of these advantages.

All processes, from making a Deposit to the withdrawal of the Deposit body and profit are prescribed in the smart contract and are available to everyone who is interested-from customers to regulators. Interested parties will see how much clients have earned, broker Commission and other financial data.

The Bank will provide 100 percent reliability. The client's funds remain in the client's Bank account for the entire period of using the company's services.

Conclusion

Manual management and document management techniques for certifying transactions that were created centuries ago lead to complexities and delays, increased errors and increased risks. This prevents the reliable collection, storage, and tracking of real-time information needed to make informed financial decisions.

It is not difficult to understand that blockchain technology can optimize these processes, bringing benefits to all stakeholders. With today's number of participants in trade chains, it is difficult to track and verify the necessary information, especially if it is transmitted in paper form.

This is where the advantage of distributed registry technologies lies. Interested parties provide confidential information available only to the participants of the transaction, receiving in turn the necessary data in real-time.

No matter at what stage the transaction is — at the initial stage, when the payment takes place, at the stage of delivery of the goods or any other, the blockchain gives all participants the possibility of permanent access to data.

Authorized parties can conduct transactions using smart contracts, such as the Ethereum Protocol. In this case, there is no need to involve a third party to verify that the terms of the transaction have been fulfilled.

In addition, having a database shared by all users reduces financial and time costs compared to manual management.