Tehran(Bazaar): Dr. Mohammad Hashemi Joo , Professor of Finance Department of Accounting & Finance Willie A. Deese College of Business and Economics North Carolina A&T State University in interview with Bazaar news agency said: in the near future, blockchain can revolutionize the traditional banking system.
On the other hand, he believes , blockchain technology will push the traditional banks to side. Blockchain technology can offer almost all traditional financial services on a decentralized base without the need for a bank.
Following is the full text of the interview:
Bazaar: What are the advantages of using Blockchain in the industrial supply chain?
Hashemi Joo: Blockchains offer a digital automated procedure for storing data which is substantially advantageous in supply chain management processes. Below I briefly discuss two main advantages of using Blockchain technology in supply chain management:
1.Improved transparency and accuracy
Blockchain offers more transparent and accurate end-to-end tracking in the supply chain. By digitizing physical assets and forming an immutable decentralized record of all transactions, block chain enables businesses to track assets from production to delivery. Therefore, Blockchain results in improved supply chain transparency which in turn can build more trust between businesses and their consumers. Moreover, Blockchain offer a platform for the smart contracts. From supply chain perspective, it means that when businesses buy raw materials and products from suppliers, the payment automatically happens only if the suppliers ship the purchase. As a result, it makes fraudulent transactions almost impossible,and it increases trust between businesses and their suppliers.
2.Improved Automation
Automation is another great advantage that Block chain technology offers in supply chain management. By using Blockchain, businesses can automaticallykeep track of each steps that their products take through the supply chain. As a results of automation, there is no room for human errors. Also, automation offered by blockchain technology can significantly improve the speed of delivery. Faster delivery in turn would result in better customer service experiences and would increase customer retention ratio.
Bazaar: What is the Impact of the blockchain on Banking and Financial Services?
Hashemi Joo: Blockchain technology can make it possible for untrusted parties to come to agreement on the state of a database, without using middleman.By delivering a public ledger that no authority manages, a blockchain offer financial services such as payments, crowdfunding, loaning and securitization without the need for a financial intermediary (bank). In my opinion, in the near future, blockchain can revolutionize the traditional banking system.
Blockchain technology can disrupt the banking industry by decentralizing the main services that financial institutions provide. These services include:
1.Payments: Block chain technology offer a decentralized public ledger for payments (e.g., Bitcoin)which increases the speed of payments and reduces the costs of money transfer.By using cryptocurrencies, users can transfer funds globally without intervention of banks.
2.Fundraising: Blockchain technology provide a platform for smart contract (self-executing contracts) that are very beneficial in fund raising. Initial Coin Offerings (ICOs) can be a replace of Initial Public Offerings (IPOs) in the near future. Corporations can raise capital faster and at lower costs without the need of investment banks.
3.Facilitating the capital market transactions: Blockchain technology can tokenize the traditional securities such as stocks and bonds and place them on public blockchains. Therefore,Blockchain technology can increase the efficiency of capital markets.
4.Loans and Credit: It provides a secure way for loaning without using the middleman. Therefore, it can reduce loan fees and interest rates.
Overall, I believe that blockchain technology will push the traditional banks to side. Blockchain technology can offer almost all traditional financial services on a decentralized base without the need for a bank.
Bazaar: What strategies do advanced economies have for using this technologyto familiarize managers?
Hashemi Joo: Blockchain technology will transform the way companies run their businesses. Based on the inertia theory, many managers and employees may resist to adopt the new technologies. The first step to break this ice is to increase the knowledge of managers and employees about the Blockchain technology. Holding seminars and providing learning materials on Blockchain technology are crucial. However, the key to succeed is incentivize managers and employees for learning. One way to do that is to pay some portion of their salary with cryptocurrencies. In this way, they need to provide their digital wallet address and they have some incentive to get familiarize with the technology. For example, a consulting company in Baden-Wuerttemberg (Germany),Targens GmbH, decided to give every employee 0.25 ether (ETH) as a Christmas present in 2018 on the condition that they create their own digital wallet until Christmas Eve. The outcome of this experience was astonishing. In the last few weeks in December, most of employees in that company were talking about Blockchain technology, Bitcoin, Ethereum during their lunch break. Employees searched different wallets and crypto exchanges. Some even got deeper and found out about mixing services. They also addressed the question where the private key is held on a laptop, a smartphone, on a printed sheet of paper — or held by an intermediary company doing custody for him or her.Nowadays, the Targens GmbH is operating as a reputable blockchain developing and consulting company in Germany and is working together with financial institutions and industrial companies. Together with these partners, the company is realizing new business models and trying to improve the way, people work together.
This example clarifies how incentivizing managers and employees can be beneficial in familiarizing them with Blockchain technology. If paying a tiny portion Ether can substantially motivate employees to learn about Blockchain, paying a high portion of managers’ salaries (for example, 50%) with cryptocurrencies would have way deeper effect on their incentive to go and explore about Blockchain technology.
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