Blockchain technology, which is tamper-resistant and distributed, transforms the "Internet of Information" into an "Internet of Value" by providing the security that the former lacks. A survey from the World Economic Forum highlights that financial services will be transformed by this technology with expectations that at least 10% of global GDP will be stored using Blockchain technology by 2025 (Deloitte, June 2016).
In this emerging world, the ownership of anything of value (stocks, bonds, real estate, land, artists, digital game assets, gift cards, air miles, personal data) can be reflected and secured using blockchain technology. Those assets will then increasingly be held by their owners, instead of sitting on the balance sheets of financial institutions. Also, transacting with these digital assets will be seamless and secure.
Imagine the world in 2040/2050… one that is hyper-connected, fully autonomous, extremely smart, with a distributed mesh network of communities consisting of people and machines. Incumbents that are centralised and have not been able to reinvent themselves will lose market share and operate at the fringe of this new economic system. In 2040/2050, most participants will control their identities (unlike today where our data is held by a third-party on our behalf). Money, in form of digital tokens, will help to make the allocation of resources more efficient than ever before. All this is happening with blockchain as an important anchor. Connected to this base layer, we see artificial intelligence, edge computing, IoTs, open APIs, etc. providing unprecedented synergies. An entirely new economic backbone is emerging. The new world will be one that empowers the individual —where they can hold financial assets directly, be their own data privacy manager, own proprietary IP, etc. The role of traditional corporations will diminish, allowing the new world "corporations" to collaborate and function as part of larger ecosystems.
Today, established financial institutions are concerned about emerging FinTech companies that offer better and more efficient banking solutions. But the initial rise of these FinTechs firms has slowly faded away, as most of them lack the most important ingredient – TRUST. Trust in financial institutions is required because customers require intermediaries to help them secure their wealth, transact or transfer securely from one party to another.
With the arrival of blockchain technology, this new security layer will sit on top of today's insecure "Internet of Information". A new "Internet of Value" is being built to securely and openly exchange anything of value. We can now transfer originals, not just copies, without intermediaries, allowing us to gradually move from a centralised world, to a partially decentralised one, and finally a new distributed world where all participants engage on a peer-to-peer basis, in real-time securely.
At Sygnum, we appreciate that "Future has Heritage" and with this perspective are building a new financial technology company that connects today's financial services (with all its relevant regulations), to the new world where anything of value is secured on immutable, open blockchains. The starting point for us, and our institutional partners, is to build and continuously enhance the most essential infrastructure components of distributed ledger technology-based financial services along the entire value chain of services from issuing, transferring, storing, trading and managing digital assets with institutional investor-grade quality. This will not only allow qualified/accredited and institutional customers to benefit, but also smaller and bigger established corporations, including banks, that may leverage on our integrated bank-to-bank (B2B) solutions to help better deliver on the needs of their customers.