The financial industry might be on the threshold of some major changes, and 2024 might be the year that could determine how these new developments pan out, claimed a recent article published by Franklin Templeton Digital Assets. Innovative solutions from the crypto domain are increasingly making crossovers into traditional finance, in a trend that could potentially upend the industry’s infrastructure for the first time in 50 years.

It’s an update that’s long overdue; the article pointed out that our current financial market infrastructure is based on developments dating back to the late 1960s, when an innovative technology of that era – computers – re-engineered the entire securities industry.

Today, it’s blockchains, smart contracts, oracle networks, and tokenisation – along with “the explicit support and guidance of local regulators” – that seem set to take the sector over the next milestone.


A numbers game

Quoting numbers from a 2023 report by the Global Financial Markets Association (GFMA) and Boston Consulting Group (BCG), the article stated that “using blockchain and re-engineering the current financial market infrastructure could unlock approximately US$20 billion annually in global clearing and settlement costs and free up approximately US$100+ billion in collateral”.

It predicted that “experimentation is likely to accelerate in 2024”, with 130 countries representing 98 percent of the global economy currently exploring blockchain-based, digital versions of their currencies. In conclusion, “tracking developments in 2024 to determine how rapidly these experiments progress will be critical”.