Can blockchain transform finance or will banks like Citi and JPMorgan use it for greater efficiency?

As financial institutions increase their investments in blockchain technology, the impact on the entire financial sector is becoming increasingly evident.

With institutions like Citi and JPMorgan expanding their blockchain portfolios, the future of finance may see new developments, but it will also face obstacles. Tanya Solativice president of business development at Ownaddressed these dynamics in a recent interview ahead of his upcoming keynote at the Benzinga Future of Digital Assets event.

The advantages of blockchain in traditional finance

Solati described the integration of blockchain into traditional financial systems as a game-changer. “Blockchain offers transparency, speed and security that could streamline financial operations,” she noted.

The technology’s potential to improve transaction processes, enhance security and reduce costs is attracting established financial institutions looking to modernize their infrastructure.

Conflicts between decentralization and centralization

Despite these benefits, Solati identified a major challenge in the conflict between decentralized technologies and the centralized nature of traditional finance.

“The real challenge lies in the conflict between decentralization and the highly regulated and centralized nature of traditional finance,” she explained. The foundation of blockchain is based on removing middlemen, giving users more control over transactions. However, large banks like Citi and JPMorgan operate within frameworks that prioritize oversight and governance, which often leads to conflicting priorities.

Finding common ground

As blockchain becomes increasingly integrated into financial institutions, Solati believes both sides need to find common ground. “The question arises as to whether these institutions will embrace decentralization, or will they simply use blockchain as a tool for efficiency while maintaining the same power dynamic,” Solati said. She suggested that while blockchain could transform the sector, its integration should not reinforce existing structures at the expense of decentralization.

As financial institutions and blockchain continue to merge, the balance between innovation and regulation will shape the evolution of the industry. Solati’s perspective highlights the promise and complexity of blockchain’s growing role in finance, making it a topic of interest at the next Benzinga event.

As the digital assets market continues to mature, the convergence of regulatory changes, M&A activity, and adoption trends will define the future of this dynamic field. Benzinga’s Future of Digital Assets event in New York this November will provide industry leaders and investors with a platform to further explore these developments, providing insight into the evolving regulatory environment and the latest dynamics of the market.

Photo by Avi Rozen on Shutterstock