Regulations

Story: US Banks Unite on Blockchain to Slash Fraud and Cross-Border Payment Costs

By Steven Anderson

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Cross-Border Payments and Identity at the Core. Cross-border payments are one of the biggest pain points the network is meant to fix.

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Regulatory Hurdles and Scalability Concerns. Here's where it gets harder. Regulatory approval is probably the single biggest obstacle standing…

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What the Industry Is Watching. The broader financial sector is paying close attention.

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Several of the largest US banks have joined forces to build a proprietary blockchain network.

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The network focuses on two core functions — data sharing and transaction validation. By running those processes on a blockchain rather than legacy infrastructure, the banks want…

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Cross-border payments are one of the biggest pain points the network is meant to fix. International wire transfers are notoriously slow and expensive, often taking days to settle…

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Identity verification is the other major piece. The consortium is building methods to use the blockchain for secure identity management — the kind that could reduce identity…

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Smart contracts are also on the table. The banks are looking at automating certain banking processes through self-executing code, which would reduce manual steps and minimize…

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Here's where it gets harder. Regulatory approval is probably the single biggest obstacle standing between the current testing phase and any real-world rollout.

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Interoperability is another headache. Plugging a new blockchain system into decades-old banking infrastructure isn't simple.

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More context: Jeonbuk Bank Partners with Ripple to Challenge SWIFTs Cross-Border Payment System

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Customer privacy sits right next to that. Blockchain's transparency is a feature in some contexts, but in banking, customers expect their data to stay private.

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Scalability matters too. The network needs to handle high transaction volumes without slowing down or breaking.

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And then there's the fintech angle. The consortium is looking at partnerships with technology firms to expand what the network can actually do.

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The broader financial sector is paying close attention. If a consortium of major US banks pulls this off, it's the kind of thing that pushes other institutions to move faster on…

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