Monetary and Banking Research Institution
Date:1/6/2019 2:51:47 PM   |   Code : 294019
Increase in Value Added of Banks with Blockchain / Cryptocurrency
Increase in Value Added of Banks with Blockchain / Cryptocurrency
The director of the Electronic Banking Department of the Monetary and Banking Research Institution, with emphasis on the different nature of the Blockchain technology and the cryptocurrency, said: Blockchain's proper uses lead to an increase in value for banks.
 

According to the Public Relations Department of the Monetary and Banking Research Institution and quoted by the news headquarter of the 8th Annual Conference on Electronic Banking and Payment Systems, Nima Amirshekari added: "With regard to the issues concerning the prohibition of the exchange of cryptocurrencies in the country by the Central Bank and the contravention of this policy with the theme of the 8th Annual Conference on Electronic Banking and Payment Systems, it is necessary to point out that the Blockchain technology and Cryptocurrencies are two different issues that are to be discussed at the 8th Annual Conference on Electronic Banking and Payment Systems and the correct uses of the Blockchain is debated so that the country's banking and payments officials get familiar with this technology, and improve their knowledge and awareness of the issue.

He added: “Using the various applications of this technology in the banking and payment industry will create added value for banks, and industry activists will be guided on how to enter this area at the 8th Annual Conference of Electronic Banking and Payment Systems.”

Amirshekari argued: DLT or Distributed Ledger Technology is a general technology on how to use extensive databanks to update database and spread on the network nodes. In the Pyramid Technology of DLT and its applications, Distributed Ledger Technology (DLT) is located at the bottom of the pyramid.

He pointed out: The most widely used of the Distributed Ledger Technology is in extensive databases, which has been among scientific and academic topics since the past 20 years. One of the derivatives of this technology, which has a narrower range, is the Blockchain Technology, which uses the (DLT) to connect transactions.

Amirshekari continued: This means that Blockchain utilizes the Distributed Ledger Technology (DLT) to connect records in a chain that can be traced and tracked through transactions on this platform.

He reminded that Blockchain technology is very effective for interconnected transactions, one of the uses of this technology is the registration of financial records, which are most used in banking and payment industries.

The payment technology expert acknowledged that Blockchain technology could be used for voting, Know-Your-Customer authentication (KYC) and other multiple cases, and one of its primary uses is in the area of ​​Cryptocurrency. Hence, the production of a Cryptocurrency that can function with or without backing on a specific route is one of dozens of applications of this technology.

He emphasized: Bitcoin is also a kind of Cryptocurrency that there is a lot of doubts about it, like the lack of backing for it, being untraceable and its high volatility. Of course, it's important to note that Bitcoin is one of the millions of DLTs and Blockchain derivatives that can be used for money laundering and criminal exploitation.

Amirshekari emphasized: The 8th Annual Conference on Electronic Banking and Payment Systems is named after the Blockchain technology, due to the importance of this technology. Because in all the IT trends in the financial industry, the Blockchain is considered as one of the evolving innovations in the banking industry in a 5 to 10 years time frame.

Referring to the fact that the Blockchain technology has a different nature from Cryptocurrency and Bitcoin, the Monetary and Banking Research Institution, as the research arm of the Central Bank, intends to focus on the Blockchain applications in the banking, financial, and payment industry at the 8th Annual Conference on Electronic Banking and Payment Systems, to raise the awareness of banking industry activists about the implementation of unnecessary projects that would only lead to the loss of resources.

Amirshekari emphasized: The Monetary and Banking Research Institution, as the Central Bank's academic arm, will discuss the uses of the Blockchain technology and the benefits of using this platform in the banking and payment industry, and specifies the direction of the banks in this area.

He continued: “Examining the different dimensions of the Blockchain technology and its applications, is a reflection of the differences between this technology and the Cryptocurrencies, which leads banks and activists of this sector to choose, with a deeper knowledge, the objectives of investing in this sector. Importantly, one of the reasons for the naming of the 8th Annual Conference on Electronic Banking and Payment Systems was the Blockchain Revolution.”

The director of the Electronic Banking Department at the Monetary and Banking Research Institution said that promoting transparency in the financial and banking industry is one of the most important benefits of using the Blockchain. “Of course, in some cases it is mistaken that the technology cannot be tracked out but there are applications such as the KYC mechanism and the authentication mechanism which prove opposite. One of the uses of Blockchain is the authentication and identification of individuals in financial networks, which is different from the previous known methods for which the rules and regulations have been laid down. Hence, the Blockchain carries out the process of authentication with new and consensus methods, i.e., which uses mathematical mechanisms for the identification of maximum and minimum members of the network.

According to him, mathematical mechanisms are far more powerful than traditional mechanisms. For example, authentication in the bank will be done by matching the national card with the face of the people, however in Blockchain, the process of authentication is performed with various technological tools, including biometrics, which includes face detection, sound, eye iris, and fingerprint.

Director of the Electronic Banking Department of the Monetary and Banking Research Institution, continued, “In the Blockchain, there is a database of all biometric indicators, which, in lieu of the human factor, computer performs the authentication mechanism. Of course, this platform has the advanced capabilities, which does not operationally allow replacing the record of biometric indicators of individuals with counterfeit records, since the inscription of each record in a Blockchain is subject to confirmation by the majority of the network.

According to him, authentication in the Blockchain networks is not necessarily bad, but is a new method that, if understood and legislated, can be used efficiently.

He emphasized: The advantages of using the Blockchain in the financial industry and its differences with Cryptocurrencies are the issues that should be discussed at the Electronic Banking Conference so that those with more information can make this knowledge available to all professionals and activists in banking and payment network.

Amirshekari said all the speakers and lecturers of the conference are those who are fully aware of the Blockchain technology and can be effective in leading the banking system in the Blockchain area. Also, foreign and domestic speakers, and representatives of large domestic and international companies have been invited to discuss issues related to raising the awareness of banking and payment activists, as in previous years.

It should be noted that the 8th Annual Conference on Electronic Banking and Payment Systems with the theme of the Blockchain Revolution will be held in the Milad Tower Conference Hall on 29th and 30th of Janurary 2019.

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