The capital markets are concerned with the matching of issuers and capital demand, as well as investors with comparable risk and return profiles. Raising capital can be a difficult process for issuers, whether they are entrepreneurs, startups, or large organizations. Firms must deal with increasingly stringent regulations, longer time to market, interest rate volatility, and liquidity risk. Navigating through a myriad of challenges, they grapple with a dearth of stringent oversight, comprehensive regulations, and robust market infrastructure for issuing, settlement, clearing, and trading. This is particularly prevalent in emerging markets where these obstacles pose significant hurdles.
Below are some of the most important payment application cases.
1. The application of blockchain in cross-border payments
Sending money across borders using traditional methods can be both time-consuming and costly. This is primarily due to factors such as currency conversion rates, processing costs, time zone differences, and limited business hours, among others. These challenges can make the process inconvenient and inefficient.
In contrast, blockchain holds immense potential in addressing these critical challenges. Its decentralized architecture simplifies and reduces the cost of cross-border transactions. With no intermediaries involved, there are no additional fees or delays, enabling seamless fund transfers between nations. Moreover, transactions occur with near-instantaneous speed, perfectly aligned with the demands of today’s rapidly evolving global economy.
2. Application in retail payments
The implementation of blockchain in retail payments brings benefits to both suppliers and customers. Retailers enjoy the advantages of instant and immutable transaction records, enhancing audits and mitigating fraud risks. Additionally, the utilization of smart contracts enables the automation of processes like warranties and return policies, resulting in improved operational efficiency.
In contrast, buyers can reap the rewards of transparent and traceable transactions. Additionally, they can leverage blockchain-based loyalty programs, unlocking innovative features like token exchange with other users and conversion into a plethora of enticing rewards.
3. Banking and lending applications
Core banking includes transaction, loan, mortgage, payment, and Internet of Things services. Many of these services rely on outdated execution methods. Between information verification, credit scoring, loan processing, and money disbursement, it takes 30 to 60 days for individuals to obtain a mortgage and 60 to 90 days for small and medium-sized businesses to secure a business loan. By lowering counterparty risk and shortening issuance and settlement times, it has the potential to improve banking and lending services.
4. Entertainment and gaming
The gaming and entertainment industries, which involve the creation and distribution of interactive and imaginative content, present a compelling use case for blockchain payments. These payments have the potential to elevate the gaming and entertainment experience while simultaneously opening up new opportunities and value for both creators and consumers.
For instance, Enjin is a platform that utilizes blockchain technology to facilitate the creation and exchange of digital assets within games and virtual worlds. These assets can include characters, goods, and collectibles, adding a new dimension to the gaming experience. On the other hand, Audius is a platform that leverages blockchain to stream and monetize music, empowering artists and fans alike.
By harnessing the power of blockchain payments, the gaming and entertainment industries can unlock a realm of possibilities, enhancing engagement, enabling seamless transactions, and fostering a more inclusive and rewarding ecosystem for all stakeholders involved.a
5. Virtual-world transactions and reward tokens
Many people believe that blockchain will be an important component of the virtual environment of the metaverse because it will enable the digital financial transactions that are expected to occur there.
Blockchain technology also facilitates the utilization of participation and reward tokens within metaverse and metaverse-like platforms. This empowers businesses to grant tokens to visitors of their virtual spaces as a means of incentivizing event participation or as redeemable rewards. It mirrors the concept of cash-back rewards in retail loyalty programs and credit cards, offering a seamless integration of virtual and real-world value.
