Blockchain explained and what banks can gain from Distributed Ledger Technologies

By Rajashekara V. Maiya Ever since Benedikt Kotruljević of Dubrovnik recorded the first known reference to double-entry bookkeeping in 1458, the General Ledger has formed the bedrock of financial accounting. But now the venerable general ledger could succumb to digital disruption, thanks to the arrival of Distributed Ledger Technology, of which Blockchain, Ripple and Ethereum are the best-known examples. Such a proposition is obviously very attractive to banks, which are taking keen interest and making exploratory investments in Blockchain and other distributed ledger technologies. Banks can also allow their customers, especially multinational corporate customers with whom they have a global relationship, to enjoy the same benefits by digitizing all their transactions and documents on to a distributed ledger. Because distributed ledger transactions are anonymous, Central Banks around the world are insisting that their banks conduct detailed investigations into their prospective clients’ credentials before onboarding them and establish their digital identities on the ledger to serve as a permanent record, which the banks can reuse or even share with other banks.