With the advent of blockchain and distributed ledger technology emerging in the past decade, comes the revelation of several challenges within the financial services industry. Especially for commercial banks, investment banks, and international financial bodies that handle over $136 trillion in cross-border payments, these institutions traditionally rely upon aging systems and processes for communication of trade and regulatory data between themselves and regulators.
With this web of overlapping inefficiencies, blockchain offers opportunities to speed up the transfer of currency and transaction information across borders for small and large institutions alike while still providing the necessary compliance checks for federal and institutional regulators. This paper aims to demonstrate that in light of the pains and immense financial costs of the current institutional payments systems, a superior future-state scenario of distributed ledger technologies is feasible. However, it will likely be rolled-out and implemented in a long and patchy manner due to the inherent risk-averse behaviors of many of today’s financial institutions.