The underlying features of blockchain technology have led to the mass adoption of this technology by various governmental bodies from different parts of the world. Some of the biggest winners remain to be the finance and banking sectors.
IOV Labs, a blockchain developer, announced on 21st April 21, 2020, that it had developed a proof-of-concept to use on a permissioned blockchain network that will run on RSK Smart Contract Network. IOV Labs is working with the Central Bank of Argentina and commercial banks such as BBVA and Santander. The new product is aimed at speeding up the processing of fiat payments, introduce end-to-end reliability, and also make them more reliable according to a statement issued by IOV.
According to Diego Gutiérrez Zaldívar, the CEO of IOV Labs, ‘by creating such a platform, the financial system will develop an ecosystem that is collaborative and that pairs well with the current technological advancements and the some of the most innovative financial systems in the world.’ He went on, ‘based on the global challenges we are facing at the moment; there is a need to use technology in optimizing processes and provide some of the best services to customers’
Some of the major players in this network will include the Central Bank of Argentina, commercial banks, clearinghouses, and other financial institutions in the country. The system is still in the testing phase, but BRCA and IOV believe that the network is likely to form the basis for an alternative clearing system.
The Central Bank of Argentina started embracing the idea of incorporating blockchain into its systems more than five years ago. However, the same institution has shown some laxity in embracing cryptocurrencies in the past. In a statement issued in 2014, BCRA warned citizens that they could not use digital coins such as bitcoin as a form of legal tender. The statement also highlighted the possible scams and frauds tied to cryptocurrencies.
The central bank wants to prove that the blockchain technology has other viable applications beyond crypto through this network. The use of smart contracts is essential when it comes to speeding up transactions, reducing costs, and lowering the number of intermediaries.
The country has similar initiatives that run on the blockchain, such as one run by the national gas regulator. The permissioned blockchain, dubbed Gasnet, seeks to bring efficiencies in the gas certification sector, which is known for its backlogs.
Other central banks from different parts of the world, such as China, are moving towards creating a national digital currency. However, it is not yet clear if BCRA will move in that route as it is focusing on developing an interbank transfer based on blockchain technology at the moment.