Banks Embrace Blockchain and NFTs for Future Operations

Wednesday, Nov 15, 2023, 8:11 PM: Leading technology expert, Leila Hurstel, CEO of Verse Estate, has observed a growing trend in banks worldwide adopting blockchain and non-fungible tokens (NFTs). She recently addressed the Banking, Innovation and Technology (BIT) event organized by Khaleej Times, sharing insights on the increasing acceptance of cryptocurrency, blockchain, and NFTs within the banking sector.

Hurstel highlighted that major financial institutions such as Goldman Sachs are already trading in bitcoin futures, indicating the mainstream acceptance of crypto. She emphasized that the adoption of these innovations is inevitable for banks to stay relevant in the future. The BIT event, held over two days, convened key industry experts to discuss vital issues in the banking industry and explore the latest technologies to meet customer needs effectively.

The financial disasters experienced with the collapse of FTX and SVb have driven a swift shift towards blockchain for robust and transparent financial systems. The rise of decentralized finance (DeFi), alongside groundbreaking technologies like Web3, Neobanks, and central bank digital currencies (CBDCs), has necessitated banks to embrace the future of finance for seamless and cost-effective financial services accessible to a broader population.

Hurstel also elaborated on the rise of neobanks, which are fully digital and lack a physical presence. Additionally, she commented on the emerging role of CBDCs, particularly in the UAE, with the anticipated completion of the Digital Dirham in 2024.

The transition to a more customer-centric digital banking culture has started to reshape traditional banks’ operations. Hurstel stressed that customers now expect more innovative solutions, indicating the success of fintechs, DeFi, and Web3 neobanks. The pressure on traditional banks to innovate and adapt is mounting, pushing them to swiftly consider new approaches.

A highlighted example of the successful integration of emerging technologies was provided with Hi, a Web3 neobank. Operating as a comprehensive financial ecosystem, Hi integrates blockchain, cryptocurrencies, and NFTs into one platform, offering customers exceptional financial benefits and security.

Moreover, Hurstel emphasized the growing role of NFTs in banks, used for secure digital identity verification and fraud reduction, offering insights into how banks like HSBC are leveraging NFTs to represent ownership of assets such as real estate and stocks.

However, she also cautioned that while blockchain enhances security and efficiency, it is not a complete solution and should complement other financial reforms, marking a shift in the banking industry’s approach to future operations.