Many administrative processes, such as insurance and compensation payments, could be automated and efficiently mapped using smart contracts. Smart contracts are “self-fulfilling contracts” that are based on distributed ledger technology (DLT). The transactions are then stored decentrally for all participants in a tamper-proof and cryptographically secure manner.
As early as 2016, there were studies that recognized this potential and expected widespread use as early as 2021. However, the breakthrough is still a long way off despite the good conditions. Regulation – always an obstacle to innovative technologies – also still holds few uncertainties.
In his article Financial sector in transition: Whoever learns faster wins, published by experten Report, SRC expert Dr. Benjamin Botermann provides an insight and overview of the challenges and opportunities associated with the use of smart contracts.
In summary, it can be said that smart contracts make it possible to drive forward the digitalization of business processes, particularly in the financial sector. Traditional financial institutions that want to benefit from the new decentralized models must now get involved and no longer just watch from the sidelines. Institutions that are now venturing into the world of crypto custody business are expanding their expertise, which is highly valuable for the progress of digitalization.
The SRC experts follow the exciting developments in the field of DLT, smart contracts, cryptocurrency and the digital euro for you and support you in the realization of your crypto custody service. We will be happy to inform you about the opportunities to get involved in this innovative sector.
