By contrast, in private Blockchains the "owners" can enable or restrict participants' capabilities in the network. Some say that these points of control revoke the main benefits of Blockchain technology.

Many banks and FinTechs have engaged in Blockchain technology lately. In most cases with permissioned Blockchains. Again, this is basically nothing else than a database, where the owners provide one admin each.

As for payments, the first Blockchain-based transaction between Germany and Canada was reported in 2016.

Does this solve some of the pain of cross-border payments, like tracking issues or unpredictable fees?

Bitcoin, as you remember an open Blockchain, has proven to be an alternative for transfers across borders, without a bank. Especially in regions where access to the financial system is difficult or use of (foreign) currencies is restricted.

For larger payment volumes however, crypto-currencies like Bitcoin do not work yet. Many experts are trying to solve this scalability issue. We will have to wait for a practical solution.

It will also be interesting to see whether SWIFT's Global Payment Initiative will heal some of the pain in the meantime without Blockchain. So far, almost 100 banks have agreed to work on a solution for cross-border payments via SWIFT.

Another annoyingly unpleasant topic in payments is fraud. The massive increase in fraud attempts is seen across all payment methods, including cyber-attacks and social engineering. In a recent incident, a $5 billion company in Europe lost over $40 million. Caused by a fake CFO email.

Prior to contemplating a Blockchain strategy we recommend to closely look at today's treasury processes and workflows. According to an AFP survey this fall, checks still dominate the B2B payment landscape (51%). So, besides Blockchain, why not switch to (same-day) ACH? And we know the background. Yet, we think it is time to move on. At least in B2B.

Finally, we should not forget embargo and sanction screening. These days, also corporates are being fined for violating OFAC regulations. Blockchain might provide a solution in a few years. But this does not exempt corporates from keeping their (payment) data clean now.

Long story short: what does Blockchain technology hold for the future in Treasury? As with all predictions: we do not know for sure. What we do know are today's challenges, and we have not even touched the payment format issues!

Many topics need to be solved before an open Blockchain can provide a valid business case for Treasury.

Therefore we recommend to do first things first. Especially with regards to payments: optimizing, harmonizing and standardizing the current set-up should be a priority. As well as making it audit and future-proof. There are solutions on the market that help you achieve that. Today.

Nevertheless, all of us should follow and filter the Blockchain news and developments closely. Especially being an IT provider, we need to be ready once customer demand and use cases trigger the next steps. We therefore permanently evaluate the possibilities that Blockchain might create.

Martin Postweiler
Director Solution Strategies – Payments and Digitization, Hanse Orga