A new paper on blockchain technology and competition has recently stated that traditional Indian financial institutions might encounter strong competition in areas such as cross-border payments from blockchain-based platforms like Ripple.

The paper is from the Ernst & Young Consultancy for the Competition Commission of India.

The authors cited some reasons why companies like Ripple can apply pressure to India’s traditional banking system. They said that this is because Ripple is faster, less expensive, and more transparent.

Authors shed some light

CoinDesk cited some parts of the paper that offered some explanation for the above thesis.

As they cited, the authors wrote, “Theoretically, it is expected that once blockchain applications cross the pilot and proof of concept stage, they will compete with other systems/technologies providing similar services that may not be based on blockchain technology.”

They also added that “This is already being experienced to some extent in the financial services sector where blockchain technology was first applied.”

An example could be the market for providing cross-border payments where traditional banks may have to compete with solutions such as Ripple.

Scrutiny in both the U.S. and India

The U.S. and India have appeared to have to scrutinize eyes as far as cryptocurrencies and their underlying platforms and technologies are concerned.

Ripple has been, for a while now, engaged in a lawsuit filed by the U.S. Securities and Exchange Commission. This was brought by the supposed violation of securities laws by the company in selling XRP to retail consumers. The regulator stated that they are considering XRP as security and since it was not registered as such, selling it was a breach of law.

The authors of the paper cited by CoinDesk said that in India, cryptocurrencies had received a great deal of regulatory attention over the past several years, “culminating in a recent recommendation by an inter-ministerial committee to ban trading and holding of cryptocurrency.”

 

Image courtesy of Cointelegraph News/YouTube

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinerx.com/blockchain/indias-traditional-banks-may-be-susceptible-to-crypto-companies-like-ripple/