Connect with us

Blockchain

Blockchain Technology in Financial Institutions and Banking

Published

6 years ago

on

The financial system has evolved from analyzing traditional ledgers to providing digital solutions such as online banking and mobile applications. It is not surprising that commercial banks around the world are entering the race for the latest technology in vogue: Blockchain. Financial institutions are increasingly betting on this technology to revolutionize the financial system once again.

Banks and financial institutions are so interested in blockchain the lies of the banking system’s competitive nature and the growing demand for faster and more efficient service. To keep pace with society, which increasingly seeks to see its needs met instantly, financial institutions seek to adapt to the demand for greater agility, new products, and services. However, the sector’s own needs, such as security, continue to be a priority and a challenge in the face of the threat of cybersecurity and hacking.

What is blockchain?

The blockchain is often described as a decentralized ledger or a replicated database on a peer-to-peer network. In other words, this technology is essentially a new type of storage that allows all of its users to share a database and make modifications safely.

Unlike other more traditional options, the data has been duplicated thousands of times through a decentralized computer network (the peer-to-peer network ) independently in this storage system.

With this public and decentralized network, transactions are protected and carried out under a total privacy blanket. Data protection is achieved through the encryption of information in the transaction link. These transactions are based on digital accounts or wallets that grant participants anonymity through their digital identity.

The system works under the participants’ consensus, conditional on each version of the data corresponding in its entirety with the information shared in the database. This eliminates the need for a central authority and puts the control in the participants’ hands, which means that any inappropriate modifications to the database will be immediately detected by all participants, turning this process into an immutable auditing mechanism.

Blockchain technology, also known as the blockchain, was developed as an underlying technology of bitcoin that aimed to record and verify the cryptocurrency transactions. The blockchain has achieved its own place thanks to its potential as a disruptor of the centralized system and streamlined more complex processes. Although bitcoin’s evolution has been erratic, other cryptocurrencies are also gaining attention thanks to this technology and the advantages it offers. To stay updated with blockchain and cryptocurrency news you can find relevant content here.

Blockchain can achieve this thanks to the nature of its design: a collection of distributed, shared, secure and immutable blocks. Each block of information is distributed to all the participants (nodes) in the network, which guarantees a replica to prevent data’s undue alteration. For a transaction to occur, its validity will have to be verified by each of the network nodes, and the information will be registered and shared transparently within the chain.

This is what makes blockchain attractive to financial institutions. To understand how blockchain will fit the modern world’s needs, it is worth taking a step back and analyzing the relevance of this technology in various sectors of the economy.

Who is using blockchain?

The World Economic Forum estimates that the blockchain stores only about 0.025% of the world’s GDP. However, the expectation is that this figure will increase, with banks, insurance companies, and companies in the technology sector leading the trend.

According to research in PwC’s 2018 Global Blockchain Survey, approximately 84% of the executives surveyed are looking to calculate the impact this technology could have on their businesses. At the same time, global companies such as Amazon, Microsoft, IBM, and Facebook are evaluating possible applications for the blockchain, as well as other financial institutions, such as JP Morgan and HSBC, and other leading multinational companies in consulting and audits, such as Accenture and Deloitte (respectively).

The interest that blockchain technology has generated can be observed in the economy’s various sectors, from finance to health and pharmaceuticals. However, banks are leading the advances in the development and implementation of this technology.

Another example is emerging economies seeking the benefits that blockchain technology offers. Kenya has explored the possibility of providing election results in real-time to build confidence in its electoral process. Meanwhile, Nigeria has adopted Oracle Blockchain Cloud Service in its customs services to support merchandise tracking, automate processes, and increase levels of transparency and trust in the business sector.

Among the advanced economies, Spain seeks to apply the blockchain in the forestry sector for time certification and improve the management of logistics companies’ supply chains. Also, in our country, Valenciaport seeks the application of blockchain technology to get closer to the concept of the smart port.

The use of blockchain in banking

For banking, the blockchain’s use offers potential benefits for the prevention of fraud and even for the elimination of some errors typical of humans. On the technical side, the validation, protection, coding, distribution, and tracking of data and transactions are the main attractions of this technology. The blockchain is already considered a transformative agent for settlement and clearing, international transactions, trade finance, identity verification, and loan management.

Since international regulations do not restrict blockchain technology, its implementation has the potential to transform the banking sector and turn it into a cooperative industry between financial services institutions and Fintech companies and boost digital cooperation and innovation. , the evolution of new business models, and more competitive banking.

Spanish banks and the blockchain

Spain quickly recognized the potential of blockchain, and banks are showing a growing interest in this technology. Below, we present some examples of the advances of Spanish banking based on the blockchain:

In April 2018, Banco Bilbao Vizcaya Argentaria issued the world’s first corporate loan with Indra. The transaction of 75 million euros was carried out with its solution based on blockchain technology. In June, BBVA and Repsol closed the first operation of a credit line for 325 million euros, again through its blockchain network. A month later, the bank issued a 100 million euro corporate bilateral loan for the ACS Group.

Banco Santander and leading company Broadridge Financial Solutions used blockchain technology in March 2018 to vote at a general shareholders meeting. Also, Santander launched via iTunes Pay FX, the world’s first application for international payments (Eurozone and USA) based on this technology. In the same year, the bank created a blockchain research team to explore its potential in securities trading, including derivatives, debt, and other products.

In that sense, according to Carlos Bernal, Indra’s director of financial services in the country, the blockchain should stop being seen as a threat, to be seen as an opportunity.

How has the financial sector changed?

It is facing a profound change in the model as a consequence of the digital transformation. Phenomena such as platformization, open banking, or the growing demand for advanced digital identity solutions mark this evolution.

However, rather than as a threat, digital transformation should be a fantastic opportunity to improve entities’ cost structure and increase their predictive capacity in terms of risk analysis.

What is the relationship that the financial sector has with technology?

This sector is in the post smartphone era, which requires the creation of a new model of digital relationship with customers and, for this, it is necessary to evolve from a branch centric concept to another customer-centric, and this is not only achieved with the closure of offices and reduction of staff.

How is security approached within the new financial environment?

The digital transaction is one of the processes that best characterizes the new model towards which the bank is heading. That is why the so-called digital identity is presented as a fundamental technology to implement new business models that take advantage of the digital field’s potential.

What is Indra’s role in this sector?

Indra is a leader in the development of technologies for the financial sector in Spain and Latin America. Currently, the top 10 Spanish entities are clients of the company, and it’s Latin American clients represent more than 40% of total banking assets in the region.

The company manages more than 2,000 projects per year for 400 banking and insurance groups in Europe, Latin America, and the Asia Pacific. And it is the leading company in means of payment in the Iberian Peninsula and one of the largest global operators in Latin America.

Additionally, it is a leading operator in digital transformation, whose differential offering aims to achieve immediate and tangible results.

They recently announced their ability to launch 100% digital banking.

We have an innovative, disruptive, and differential offer that allows creating a native digital bank from scratch in record time. In practice, our model enables the financial institution to respond quickly to the challenges posed by the new context, characterized by an unprecedented level of interaction with customers through exclusively digital channels.

What do banks gain from this?

The banks, which count on Indra as a technological partner, enjoy the highest functionality and ability to serve their customers, thus offering a differential service with high added value.

Thus, the banking customer benefits from a personalized and homogeneous user experience.

What is your perspective on the ‘blockchain’?

For us, this technology has a great capacity for transformation in complex scenarios and processes. Several actors have to trust and collaborate since it provides two essential elements for change: more trust and less friction while focusing on information privacy and performance.

How could the ‘blockchain’ boost the financial sector?

This technology can represent significant savings in terms of infrastructure and an improvement in the efficiency of the processes in the back office.

Besides, it is a facilitator for the development of new digital businesses, which lead to the implementation of new business models and the design of new products and services. The blockchain system works like a large ledger or database.

Do you already have experience in this type of technological development?

BBVA and Indra have successfully concluded the first operation that facilitates the negotiation and signing of a corporate loan using blockchain worldwide; this, in line with their close collaboration to transfer the advantages of the most advanced technology to business operations.

How does blockchain technology help in the accounting of people and companies?

One way that the blockchain can represent a step beyond accounting lies in the fact that, instead of keeping separate records based on transaction receipts, parties will be able to write their transactions directly to a common record. These entries are protected with encryption so that falsifying or deleting them is practically impossible.

Will digital accounting be more and more a trend?

Indeed, the blockchain allows us to go beyond digital accounting. Although digitized, the accounting processes always required a neutral mediator to verify the acceptance of the terms of both parties, making the operation possible.

What other uses does the ‘blockchain’ have?

Despite the advances of the blockchain, financial transactions continue to transit mainly through networks and infrastructures that were built half a century ago. The operating systems of banks were designed on network protocols that are not current.

Therefore, it is not plausible that replacing banking and interbank infrastructures from off-blockchain to on-blockchain is imminent, but it should be intensified as of 2020.

But if a bank uses blockchain, there are no risks that the copy of the database on my computer can be compromised?

Blockchains can be public or private databases. If we had a public registry like a property registry, maybe we would like to have a public blockchain. If we are a private entity, we can choose to encrypt the database, and the encryption system is protected by the collective power of the connected computers. To this day, the world does not know a safer protection system than BlockChain. In a public BlockChain, such as Bitcoin, you can see the history of the transactions, but the two parties’ entity is secret.

In addition to security, Bitcoin offers other benefits. Since each piece of information has a unique identifier, a user’s ability to “double pay” is eliminated. In other words, if I have a digital photo and I send it to my friend, in the world of Bitcoin, the photo cannot be copied, and it is transferred from me to my friend. Bitcoin also offers to speed up transactions and lower costs by eliminating the burdensome part of verifying transactions. Electronic money, financial products, even physical property, can be registered in a BlockChain, eliminating the need for many red tape and lawsuits to determine who is the “real” owner of something.

As a new technology, BlockChain is still being tested and explored to determine its best uses. As JPMorgan Chase and Goldman Sachs, along with bags as NASDAQ, banks are investigated the potential of BlockChain (a technology whose source code is free and available for anyone to download person). In short, BlockChain could represent the next wave of innovation in the financial sector. Is your bank considering how to use it? What other uses could we give to BlockChain? Leave your ideas in the comments section.

Related Topics:

The Bitcoin Daily is one of the most reliable and leading portal about Technology News, Latest Updates, Financial News, Business and any all subjects related to technology and blockchain.

Continue Reading

Blockchain

ERC-7943 Enters Final Status as Ethereum’s Framework for Real-World Asset Tokenization

Published

2 weeks ago

on

May 27, 2026

By

The Universal Real-World Asset (uRWA) standard is now specification-frozen and ready for production adoption across Ethereum and EVM-compatible networks

ERC-7943, the Universal Real-World Asset (uRWA) standard, has reached Final status within Ethereum’s formal standards process. The specification is now frozen – with its interface, error definitions, event signatures, and behavioral requirements fixed – and is available for production adoption across Ethereum and EVM-compatible networks.

ERC-7943 defines a minimal, vendor-neutral interface for the compliant tokenization of real-world assets. The standard addresses transfer validation, asset freezing, forced transfers, and enforcement actions without binding implementers to a specific identity provider, jurisdictional framework, or compliance stack. This approach enables institutions and developers to deploy regulated assets across jurisdictions while retaining flexibility over underlying compliance infrastructure.

“ERC-7943 gives institutions and developers a modular interface for compliance, transfer controls, and enforcement, so they can deploy regulated assets in any jurisdiction without depending on a single vendor’s stack,”

said Dario Lo Buglio, lead author of ERC-7943. “Compliance becomes pluggable since the standard separates the on-chain interface from the underlying KYC, sanctions, and jurisdiction logic.”

Final status represents the threshold for enterprise adoption in Ethereum’s standards process, as proposals may undergo substantial changes before reaching this stage. ERC-7943 attained Final status following multiple cycles of community review through Ethereum Magicians and the EIP working group. With the standard now finalized, institutions and infrastructure providers can build on a stable specification designed for long-term interoperability.

Early adoption is already underway. The Capital Markets and Technology Association (CMTA) has integrated ERC-7943 into recent releases of CMTAT, its open-source tokenization framework deployed in institutional initiatives globally. Chainlink has separately demonstrated compatibility through a public pull request tied to its Asset Compliance Engine (ACE). Brickken plans to integrate ERC-7943 into upcoming institutional infrastructure upgrades, with the standard expected to become the default framework across its product suite. These developments signal a transition from specification to active deployment across infrastructure and compliance environments.

The coalition supporting ERC-7943 has grown since its September 2025 announcement and now spans the full RWA stack, encompassing issuance platforms, infrastructure providers, exchanges, marketplaces, identity vendors, and audit firms. Backers and contributors include Bit2me, Brickken, Casper Network, CMTA, Compellio, Dekalabs, DigiShares, Forte Protocol, FullyTokenized, Propchain, RealEstate.Exchange, Stobox, and Zoth. Hacken and QuillAudits serve as security and audit partners.

The standard is open for adoption by issuers, infrastructure providers, and developers building tokenized financial instruments. Documentation, reference implementations, and community channels are available at erc7943.org. The full specification is published at eips.ethereum.org/EIPS/eip-7943.

About Bit2me

Bit2Me is the leading cryptoassets company in Spain, registered with the CNMV as a Crypto Asset Service Provider (CASP). The company has been building crypto infrastructure for more than 10 years and holds several cybersecurity and regulatory compliance certifications, including: ISO 27001 for Information Security Management; ISO 22301 for Business Continuity Management; ISO 37001 for Anti-Bribery and Corporate Ethics; ISO 37301 for Compliance Management Systems; UNE 19601 for Criminal Compliance Management Systems; and the CSA STAR Level 1 certification. https://bit2me.com/

About Brickken 

Brickken is a global leader in the tokenization of real-world assets, offering a comprehensive SaaS platform that enables businesses to tokenize equity, debt, and revenue-sharing models. By integrating traditional finance with blockchain technology, Brickken provides tools to simplify asset management, enhance investor engagement, and unlock liquidity. With over $500 million in tokenized assets and a presence in 30 countries, Brickken is at the forefront of innovation in asset tokenization. To learn more about Brickken, visit www.brickken.com/

About Compellio

Compellio SA is a deeptech company headquartered in Luxembourg providing global infrastructure components for bridging the gap between web2 and web3 computing. Based on its patented technology, Compellio works with public and private organisations in driving regulatory-compliant solutions across multiple industries. Compellio’s tokenisation platform enables developers to abstract away the complexity of smart contracts and build standardised interoperability frameworks for the lifecycle management of their physical, digital, and hybrid assets. For more information, visit https://compellio.com

About Dekalabs

Dekalabs is a Valencia-based software development and digital transformation consultancy specializing in cutting-edge blockchain solutions. With a multidisciplinary and senior technical team, they deliver bespoke services spanning mobile applications, web applications, corporate solutions, UI/UX, and artificial intelligence (dekalabs.com).

About DigiShares

DigiShares is a market-leading provider of white-label software for the compliant issuance, management, and trading of tokenized real-world assets. The platform enables asset owners and fund managers to fractionalize assets, onboard global investors at low cost, and provide peer-to-peer or exchange-based liquidity through integrations with regulated venues such as RealEstate.Exchange. With more than 200 clients worldwide, offices in the US and Denmark, a network of 80+ legal partners, and integrations across Ethereum, Polygon, and other EVM chains, DigiShares offers one of the most flexible and customizable solutions in the industry. See www.digishares.io. 

About Hacken

Hacken is an end-to-end blockchain security & compliance partner for digital assets. Unlike traditional providers, Hacken was born on blockchain. We combine deep Web3 expertise with enterprise-grade quality, AI-powered offensive security, and globally recognized certifications. Since 2017, Hacken has been trusted by 1,500 adopters including the European Commission, ADGM, MetaMask, Ethereum Foundation, and Binance to secure the new digital frontier. Visit www.hacken.io

About the Forte Protocol

The Forte Protocol is a next-generation blockchain infrastructure that unlocks tokenized economies, enabling developers to define, launch, and monetize their on-chain projects. Through its ecosystem of products and services, Forte Protocol is the infrastructure layer for safe, enduring digital economies that generate long-term value for developers and users. For more information, visit ForteFoundation.io

About FullyTokenized

FullyTokenized is a boutique development company specializing in custom blockchain, tokenization, and Web3 solutions. With a proven track record of delivering successful projects in highly regulated financial environments, including for Fortune Global 500 institutions, the company has contributed to projects representing more than $500M in tokenized value. FullyTokenized also empowers Web3 startups, helping them launch products in under 90 days and scale within the decentralized ecosystem. Visit https://www.fullytokenized.com to learn more.

About Propchain

Propchain is the technology vertical of Prop.com, building institutional-grade infrastructure for real estate financing and tokenized capital markets. Backed by Prop.com’s ~$150M in AUM and active operations across Europe and the UAE, Propchain connects real-world deal flow to digital rails for origination, compliant issuance, lifecycle servicing, investor reporting, and secondary distribution. The company is building one of the world’s first fully unified, standardized, verified data infrastructure layers for real estate—harmonizing operational, financial, and legal data into auditable records that enhance underwriting, monitoring, and transparency. Securitisations are issued out of Luxembourg, aligning with European regulatory frameworks and institutional best practice. Propchain’s product suite, including PropYield, is purpose-built to bridge high-quality real assets with modern market infrastructure, enabling scalable access to real estate yield while preserving rigorous compliance, governance, and data integrity.

About RealEstate.Exchange

RealEstate.Exchange (REX) is the world’s first licensed and regulated exchange purpose-built for tokenized real estate shares. REX combines decentralized finance technology with full compliance layers, enabling investors worldwide—both retail and institutional—to trade tokenized real estate shares directly from their self-custodial wallets. The platform offers instantaneous atomic-swap settlement, competitive listing fees, and a liquidity framework supported by the BRICK token. With its global legal network and partnerships with licensed entities, REX aims to become the go-to venue for secondary trading of tokenized real estate, see www.realestate.exchange. 

About Stobox

Stobox is a turnkey asset tokenization provider and technology company focused on building the infrastructure for compliant digital assets. It enables businesses and individuals to transform real-world assets into tokenized instruments that are transparent, liquid, and accessible. Core solutions include Stobox 4 for token issuance and management, the STV3 Protocol for compliant token frameworks, Stobox DID for digital identity, and the Stobox Oracle for real-world data integration. Its structured methodology supports issuers across every stage of the tokenization lifecycle, from legal readiness to fundraising and secondary markets. Companies benefit from streamlined access to capital and global investors, while investors gain exposure to previously illiquid opportunities. https://www.stobox.io/

About Zoth

Zoth is reimagining global finance with the world’s first full-stack, modular Stablecoin Operating System, enabling enterprises and institutions to launch stablecoins and tokenized RWAs 90% faster and 70% cheaper. Its core products include FAAST (compliant tokenization infrastructure), Stablecoin Studio (stablecoin-in-a-box), ZeUSD (yield-bearing stablecoin), and PayX7 (stablecoin payments infrastructure).

Zoth delivers a full-stack suite spanning tokenization, payments, and yield management, supported by BVI & CIMA-regulated fund structures across 127 countries. Recognized by Messari as a top player in PayFi and RWAFi, Zoth combines compliance, scalability, and innovation to power the future of real-world finance. Visit https://zoth.io/.

Continue Reading

Blockchain

LayerZero Blames Kelp Setup for $290M Exploit as Aave Fallout Deepens

Published

2 months ago

on

April 22, 2026

By

The fallout from the recent Kelp DAO exploit continues to ripple across the crypto ecosystem, with LayerZero pointing to a flawed system setup as the root cause of the attack.

Single Point of Failure Led to Exploit

LayerZero said the breach stemmed from how Kelp DAO configured its decentralized verifier network (DVN).

The attacker drained roughly 116,500 rsETH, valued at nearly $293 million, from Kelp’s LayerZero-powered bridge.

According to LayerZero:

  • Kelp relied on a 1/1 DVN setup, meaning only one verifier was used
  • This created a single point of failure
  • Prior recommendations to diversify verifiers were not followed

As a result, the attacker was able to exploit the system without needing to bypass multiple verification layers.

LayerZero Distances Itself

LayerZero stressed that the issue was not a flaw in its protocol, but rather how Kelp implemented it.

The company is now:

  • Urging all projects to adopt multi-DVN configurations
  • Warning it may stop supporting apps that continue using single-verifier setups

Aave Hit With $195M in Bad Debt

The impact quickly spread to Aave, where the attacker used stolen assets as collateral to borrow funds.

This led to:

  • Around $195 million in bad debt
  • A sharp drop in Aave’s total value locked
  • Billions withdrawn by users amid rising concerns

Liquidity issues have also emerged, especially around Ether-based lending pools.

Liquidity Risks Raise Alarm

Reduced liquidity on Aave is now creating additional risks.

Analysts warn that:

  • Markets are nearing 100% utilization
  • A 15% to 20% drop in Ether price could trigger further instability
  • Liquidations may fail under current conditions

To limit further damage, Aave has frozen rsETH markets across its platforms.

Who Covers the Losses?

With no clear recovery plan, debate has intensified over who should absorb the losses.

Suggestions from industry figures include:

  • Negotiating with the attacker for a partial return of funds
  • Using ecosystem funds to cover losses
  • Spreading losses across users
  • Attempting a rollback to pre-hack balances

Each option carries trade-offs, and no consensus has emerged.

Broader Implications for DeFi

The incident highlights how interconnected DeFi protocols can amplify risk.

A vulnerability in one protocol can quickly:

  • Spill into lending markets
  • Trigger liquidity crises
  • Impact multiple platforms simultaneously

Security Practices Under Scrutiny

LayerZero’s criticism of Kelp’s setup underscores a key lesson: security configurations matter as much as the underlying technology.

As protocols grow more complex, ensuring robust multi-layer verification systems may become essential to preventing similar exploits.

Continue Reading

Blockchain

Privacy Protocol Umbra Shuts Down Front End to Disrupt Hackers

Published

2 months ago

on

April 22, 2026

By

Privacy-focused crypto protocol Umbra has temporarily taken its front-end interface offline in an effort to slow down hackers attempting to move stolen funds.

The move comes amid heightened scrutiny following a series of major exploits across the crypto ecosystem.

Front-End Taken Offline After Suspicious Activity

Umbra said it identified roughly $800,000 in stolen funds being routed through its protocol. In response, the team placed its hosted front end into maintenance mode.

The protocol noted that the interface will remain offline until it is confident that restoring it will not interfere with ongoing recovery efforts.

This action follows the recent exploit of Kelp DAO, where attackers stole over $280 million, with some reports linking the movement of funds through Umbra.

Limits of Control in Decentralized Systems

Despite shutting down its front end, Umbra acknowledged a key limitation: it cannot stop users from interacting directly with its smart contracts.

Because the protocol is open-source:

  • Users can access it through self-hosted interfaces
  • Alternative front ends can be deployed independently
  • Smart contracts remain fully operational onchain

This highlights the broader challenge of controlling decentralized infrastructure once it is live.

Debate Over Responsibility Intensifies

The situation has reignited debate around developer responsibility in decentralized systems.

Roman Storm, co-founder of Tornado Cash, argued that disabling a front end may not be enough to satisfy regulators.

Storm, who was previously convicted in a high-profile case, said authorities may still view control over a user interface as control over the protocol itself.

He warned that:

  • Modifying or shutting down a front end could be interpreted as governance authority
  • Developers may still face legal accountability regardless of decentralization claims

Umbra Defends Its Design

Umbra pushed back on claims that its protocol is useful for laundering funds.

The team emphasized that:

  • The protocol primarily protects the receiver’s identity, not the sender’s
  • Transactions remain traceable onchain
  • Stolen funds routed through Umbra can still be identified

It also confirmed that it is working with security researchers to track suspicious activity.

Ongoing Pressure on Privacy Tools

The incident reflects growing pressure on privacy-focused crypto tools as regulators and law enforcement target illicit fund flows.

While some platforms have taken steps to freeze or block hacker activity, decentralized protocols like Umbra face structural limitations in enforcement.

A Balancing Act Between Privacy and Security

Umbra’s decision underscores a broader tension in crypto:

  • Preserving user privacy
  • Preventing misuse by bad actors

As exploits continue and scrutiny increases, protocols may face tougher choices around how much control they can or should exert over their systems.

Continue Reading

Trending