11 ways Blockchain Impacts the Global Economy

11 ways Blockchain Impacts the Global Economy

The universality of blockchain technology is evident from the hype about cryptocurrency in the past decade. Blockchain technology, albeit still developing, is deployed for a wide range of uses, not just trading digital coins. One such example is the shift in decentralized currencies for trade, not just on an individual but macro level. While the finance world may slowly creep up to fully accept cryptocurrencies, the rest of the world and its acceptance of crypto has shown a preference for blockchain. While bitcoin is one of the earliest applications of blockchain technology, it isn’t the only one. This article addresses the impact of blockchain technology on the economy.

  1. Ease in banking

Many individuals who do not have access to secure banking services may resort to blockchain technology. Blockchain technology allows you to carry out transactions in a safe manner without a financial intermediary like banks. Especially in emerging economies where banking services lack considerably, blockchain can provide a safer route for transactions. In addition, the decentralized nature of blockchain technology makes trade secure and speedy.

  1. Greater utility

Digital assets like cryptocurrencies provide great utility like investment opportunities. Especially for weak currencies like the Swedish Krona, Investors based in Sweden might find the BTC to SEK rate convenient to invest in high-value assets like cryptocurrencies. Besides investment, blockchain technology also allows trading, lending, and narrowing of assets. The convenience of purchasing cryptocurrencies or using them for gaming applications and real estate transactions is what yields greater utility. Now trading with crypto is even easier, thanks to reliable trading platforms like currency.com.

  1. Readjustment of the financial marketplace

The financial marketplace has witnessed some obvious impacts of blockchain technology for clearing and settling transactions. Where previously firms and individuals used financial securities to carry out transactions are not resorting to digital currencies and assets for completing trades. Instead of fiat currency, business transactions may use digital assets like digital tokens, stablecoins, digital currencies, and non-fungible tokens (NFTs). The decentralized nature of blockchain technology provides a safe transaction route, preventing the trade from cybercriminals and sometimes unwanted surveillance.

  1. Ease of cross-border data exchange

The decentralized nature of blockchain technology provides a safe route for cross-border data exchanges among public organizations and private companies. Cross-border exchanges are at an elevated risk of cyber threat; however, with blockchain technology, a safe route without the surveillance of an unknown authority is convenient. Especially for customs authorities, blockchain technology is imperative in data exchange between economic and trading organizations.

  1. Greater financial inclusion

Blockchain technology enables the inclusion of individuals and organizations previously out of the realm of financial services. Since blockchain provides a safe route for financial transactions and is more affordable and risk-free, it helps facilitate credit creation, payments, and transactions. For instance, during the primetime of COVID-19, digital assets were at the forefront of fostering financial inclusion. The American government initiated financial bailout packages during the first year of COVID-19. However, more than 6% of Americans didn’t have a bank account to receive the benefits of the bailout package. This rift opened debates to consider digital currency for greater financial inclusion and safer payments.

  1. Increased transparency

Blockchain technology improves payment transparency, trust, efficiency, and security while reducing the cost of financial trades. Previously, interbank transactions could take up to a week, but with blockchain, this trade can occur in minutes, perhaps seconds. Digital currencies and decentralized ledgers increase the payment speed, reduce time lag and make it more convenient and cheaper. Many central banks have considered blockchain for its distributed ledger feature as it saves a lot of time and money for both ends of the transaction. Blockchain also reduces the need for an intermediate, thus removing the need for banks or staff at financial institutions.

  1. Ease of settlements in stock markets

Stock exchanges like NASDAQ are at the forefront of exploring blockchain’s usage for stock settlements. Blockchain can help reduce transaction time and cost for stock settlements. In addition, with smart contracts backed by blockchain technology, stock exchanges can ensure transparency and privacy.

  1. Energy Efficiency

Whenever there is a discussion on digital assets and cryptocurrencies, a debate on blockchain’s energy efficiency ensues. Cryptocurrency mining, like the mining industry, has enormous environmental implications. The mining process for digital currencies is energy-intensive. When a currency is mined, a computer network is running behind it. Greater power is required to run such a vast network of machines, thus more carbon dioxide emissions which are harmful to the environment. While some mining companies have introduced less environmentally damaging ways, other propose that gold mining and the existing financial system is more harmful.

  1. Asset Management

With the expansion of the global economy and everyday trade, the asset management industry is also growing. By 2025, the asset management industry is expected to be USD 150 trillion. Asset management and the supply chain network focus on creating a digitally centralized system to monitor assets. The distributed ledger system, backed by blockchain technology, helps ease trading and transactional settlements by reducing cost, improving data accuracy, and decreasing time delays.

  1. Improvement in the know your customer-chain (KYC)

KYC is essential for financial institutions like banks to reduce illicit activities like terrorist financing, illegal monies, white collar crime, or money laundering. The KYC process is a verification method to confirm the customer’s identity while carrying out a transaction. However, the traditional KYC process is time-consuming, labor-intensive, and vulnerable to errors. With blockchain technology, the KYC chain is streamlined and less prone to risk. Blockchain helps counter the labor-intensive feature of the KYC chain. In addition, it automates the identification process by verifying digital copies of ID and other necessary information. Blockchain also helps reduce the cost associated with the KYC process and maintains the sanctity and privacy of data.

  1. Fraud-free insurance claim

Among other industries deriving benefits from blockchain technology, the insurance industry is automating its claim management system. Through blockchain, sorting and processing insurance claims through smart contracts are feasible. As mentioned before, blockchain enables safe data exchange between industries and borders. It safely helps access customer data, verifies customers’ identities, and enhances the claim settlement process, making it less prone to risks and cyber threats. Blockchain technology enables time efficiency for cross-checking insurance claims and provides a safe route for collaboration between the broker, banker, client, and insurer.


The global economy is moving ahead with blockchain technology at its disposal. Blockchain has revolutionized the banking and financial sector and other aspects of the global economy. It provides a safe and efficient route for transactions and settling cross-border trades. As a result,  a global network with reliance on blockchain technology is more efficient, cost-effective, and transparent.

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