European Banks Are Pushing the Adoption of Blockchain TechnologyThe banking sector is upgrading its infrastructure.

From the advent of the first blockchaintechnology, those within the financial sector knew things were about to change. Since the introduction of blockchain technology in 2008, it was often said that banking institutions around the globe were about to face a fairly tough time, that could even make them completely redundant and impractical. Consequently, several voices began to denounce the blockchain as the bank'senemy No. 1.

Related:Why London Is Becoming a Global Blockchain Hub

However, it appears that for every person with a conservative mindset, there was also a forward thinker exploring the promising opportunities that were given to him. As IBM found in 2016, banks areadopting distributed ledgersmuch faster than anyone expected. Absolutely justifiably, since a wide adoption could save banking institutions up to $27 billion annually by 2030, according to arecent studyby Juniper Research.

The disruptive advancement that is called blockchain is conquering the financial sector. Let's find out what's happening and what role the Europeans have in it.

Europeans are pushing forward.

Until the end of 2017, "pretty much everything had been experimental and prototypes. Production was something small and safe in the corner,"saidDavid Treat, head of Accenture's capital markets blockchain practice. But, since the beginning of 2018, it seems like the banking sector got down to business and actually started using the promising technological advancement.

On May 14 this year, the banking giants HSBC and ING made thefirst real transactionon a blockchain between two banks. The purpose of this transaction was the trading of agricultural goods and it is considered a milestone for cross-border trading.

We also saw a group of European banks completing the first test stage in a blockchain interbank reconciliations trial in October. Led by Italy-based Associazione Bancaria Italiana, 14 banks, including BNP Paribas, contributed two months of data to a Corda-based blockchain network. The originalpress release, delivered in Italian, mentions the establishment of the first phase as a "basis for subsequent synergistic implementations of DLT technologies," which also includes a form of smart contracts that will regulate the transfer of data.

Related:Entrepreneurs Are Flocking to Europe to Open Cryptocurrency Businesses

With ABI Labs at the helm overseeing a million test transactions between the banks involved,reports showthat the performances were satisfactory, which will allow the process to move forward to the next phase. This cooperation between European banks comes on the heels of a project led by the Polish bank PKO Bank Polski, in partnership with the tech company Coinfirm, that will see blockchain technology utilized to notify customers about changes to product terms. The project, titled Trudatum,was describedas a"breakthrough on a global scale"by Pawel Kuskowski, President of Coinfirm.

All those success stories inevitably attracted the attention of the European Union. The association already announced in April that its members are invited to team up to research and experiment with blockchain technology in the so-calledEuropean Blockchain Partnership(EBP). Just a few weeks ago, the EU established a new blockchain forum that also invited at least five major European banks, such as Santander and BBVA. TheEU Blockchain Roundtable's goalis "Bringing industries together for Europe to lead in blockchain technologies."

There is an industry-wide reluctance to change.

金融行业是闻名缓慢的implementation of technology, with many pointing to that hesitancy as one of the primary reasons for why it has fallen so far behind the curve. It could be possible that the real progress within the blockchain banking sector may be led by a platform outside of the traditional banking establishments. One such project is set to begin opening client accounts in December.

Founded by former bankers of HSBC, Credit Suisse, Bank of New York and UBS, EQIBank is looking to turn the banking sector as we know it on its head, by offering the traditional services of a fully licensed, regulated bank in conjunction with the opportunity to manage traditional and crypto assets all within a single banking relationship. Services will include trading, lending, custody, settlement and clearing.

Related:Europe Is a Leader in Blockchain Adoption

At theofficial launchof EQIBank, CEO Jason Blick said that "there is a lot of market speculation about the delivery of a new generation of bank -- one that can bridge the worlds of crypto and national currencies. However, EQIBank is the only licensed, regulated bank that is operational and ready to receive applications for accounts."

This falls in line withnovel blockchain legislation有限公司ming from Bermuda. This piece of legislation officially enables native banks to deal with new financial technologies. As Huhnsik Chung, a partner at Stroock & Stroock & Lavan LLP, with more than 25 years of legal experience in the financial services industry,put it in referenceto the recent initiative: "It is often the case with new technologies and new lines of business, first movers will be well-positioned to attract a lion's share of the burgeoning fintech market."

Banking is competitive.

Since the introduction of popular cryptocurrencies like Bitcoin, banks around the globe obviously figured out that something needs to change. We have seen them formfive international blockchain consortiaand several other initiatives that all aim to push forward the tradefinancesector. Yet, those advancements would often not affect the banking customers itself, although therecertainly are some benefitsthat consumers might be interested in. With the recent news from Bermuda and real banking alternatives like EQIBank, the global banking industry might have a new, serious competitor that could completely disrupt their business in the near future.