HomeBanking and Financial markets

The commercial potential of blockchain and digital currencies

More transparency, traceability, and security can create tangible improvements to financial services and international transactions.

Download the report

Blockchain networks hold tremendous power in their ability to boost security, which can help ensure data integrity, promote transaction and settlement efficiency, and verify identity.

However, many current business applications of blockchain are still in experimental stages. Use cases range from academic research experiments to the eventual issuance of central bank digital currency.

Although mainstream adoption of blockchain applications is nascent, it’s advancing swiftly. Numerous blockchain experiments for international payments have been conducted in recent years. And virtually all of them fall into three design patterns, which are reviewed in this report: the custodian model, the correspondent model, and the digital asset model.

One problem with the digital asset model can be a lack of confidence in the underlying digital asset. Legitimate questions arise about who controls the exchange rates for digital currencies, resurfacing fears of foreign exchange market manipulation and concerns for liquidity provision.

The traceability of blockchain can help prevent financial crimes such as money laundering and corruption, and the efficiency of blockchain will reduce transaction and settlement frictions.

This report explores how blockchain, as well as “altcoin” alternatives such as Bitcoin, can help create a future of programmable money.

Bookmark this report  

Meet the authors

Jesse Lund

Connect with author:

, Vice President, Global Blockchain Market Development, IBM Financial Services Sector

Jed McCaleb

Connect with author:

, Stellar Cofounder and Chief Technical Officer

Lindsay Lin

Connect with author:

, Counsel and Program Manager, Lightyear.io

You might also like

If they can rethink their business models, banks across India are uniquely positioned for success in the age of cross-industry platforms and ecosystems.


If banks can rethink their business models, they are uniquely positioned for success in the age of cross-industry platforms and ecosystems.


Financial institutions are exploring quantum computing to enable calculations that are not possible with traditional computing technology.


New entrants into virtual banking may change what we traditionally think of as a bank.


There are compelling reasons to begin assessing the role and potential of quantum for your business now.


Programmable money is real money represented in digital form, also known as tokens. Monetary digital assets and the interconnected networks where they live are becoming the heart of the new global financial infrastructure.