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The Blockchain is the New Standard for Financial Transparency

Bank transfers in their present form would never have been permitted if the blockchain had been invented 50 years ago.

Traditional bank transfers are first and foremost expensive compared to the Blockchain technology. Spain’s largest bank, Santander, estimate a 20 billion dollar saving on infrastructure costs by using blockchain technology.

Secondly, bank transfers are not transparent and are thus vulnerable towards any bad actor looking for an easy way to hide money transfers to support financing of terror and for money laundering. This is evident with numerous occasions of well-established banks being fined for breaking the rules – latest with the HSBC case in Switzerland. And investigators find themselves struggling to get access to data in the fight against terror.

cash in envelope
 The lack of transparency of bank transfers makes them vulnerable towards money laundering and financing of terror.


Today, a payment or transfer using the blockchain is by far the cheapest, safest and most transparent way in which two people can exchange ownership. And whilst a string of the world’s largest banks are investing in the technology and know-how of the blockchain, as a whole banks are still lacking behind.

Trusting other participants to follow the rules when using the blockchain is needless. Circumventing those rules is mathematically impossible by design.

Attempts to process a transaction with a fake sender ID will automatically face rejection by the entire network. For those reasons the system is the most transparent and traceable system there is.

'The trust machine'
The Economist has dedicated their October 2015 issue to the blockchain. The illustration is taken from the cover story, “The Trust Machine”.

The blockchain behaviour stands in strong contrast to the contemporary bank transferring networks used by all banks today. These networks have written rules, which are impossible to govern by automation. And as such a single bank – or even a few employees of a bank – will easily be able to manipulate the origin of a specific money transfer or the determination of the ultimate owner prior to the relay of the transfer. The large fines issued to the rule breakers often expose the weakness of the contemporary system.

Banks are investing in the technology

Amongst the banks researching blockchain technology, Citibank is investigating the possibility of issuing their own so-called Citicoin. Furthermore, the bank has made recommendations to the British government to issue Great British Pounds on a blockchain infrastructure to enable very fast and highly efficient transfers between financial institutions as well as inexpensive retail payments.
The investment bank USB is currently establishing a developmental environment for blockchain services in London, and Barclays has engaged in an agreement with a Swedish blockchain company. They are supported by a Goldman Sachs report predicting the blockchain technology will provide the world an annual saving of 200 billion dollars in transaction fees alone. Goldman Sachs also participated in a 50 million dollar investment round in the blockchain company Circle.

Spain’s second largest bank BVBA can be found amongst the most active in the space. First by joining a 75 million dollar investment round in the blockchain company Coinbase with the New York Stock Exchange, amongst others. Subsequently BVBA released a video guiding consumers to create a blockchain account and acquiring their first digital currency units.

Naturally Deutsche Bank is also engaged; in a reply to the European Securities and Markets Authority, the bank states it is investigating the usability of blockchain technology within enforcement of financial derivative contracts as well as established mathematically guaranteed “Know Your Customer” and “Anti Money-Laundering” registries.

BNP Paribas, the largest bank in France, writes in their internal magazine that applying blockchain technology to securities trading will render entire sectors redundant and that the blockchain technology may be “considered an invention equalling the steam- or combustion engine”.

Blockchain technology combats international money laundering

Experts are realising how open and transparent the blockchain system is. All transactions which have ever been made are stored and recorded forever in a public journal, that every person can access and read freely on the internet.

If banks used a public journal system, such as blockchain, where everybody could view their transactions across national borders, large scale institutionalised international money laundering would be virtually impossible.

The technology represents a new standard of efficiency and transparency for financial transactions, and German, French, Swiss, Spanish, British, as well as American banks are already implementing it.

Banks and financial institutions who have still to form a strategy working with blockchain technology are missing out on what in the Wall Street Journal was called “one of the most powerful innovations in finance in 500 years.”

Truly, the only reasons not to get involved are protectionism and habitual thinking, which never win in the long run.


Blockchain is the new black.



Lasse Birk Olesen

Lasse Birk Olesen

Chief Product Officer at Coinify


Christian Visti LarsenChristian Visti Larsen

CFO & Head of Strategy at Coinify




Coinify – Integrating Bitcoin technology seamlessly with established financial institutions.

This post has evolved from the original article published at the Danish financial paper Børsen.

Image credits (from top down):, (Jon Berkeley), Coinify