One of the reasons people start crypto companies is to make the world a better place by creating a decentralized, permissionless financial system. Most of the time, the idea comes from frustration with the rent-seeking middlemen who sit between the traditional financial world and the rest of the world. But it’s ironic that crypto companies, which were made to improve the financial system, still have to use the old-fashioned methods of traditional finance.
One pervasive pain point is payments. They are an important part of the financial infrastructure and a basic building block. This process, which seems simple, has been made much more complicated than it needs to be to meet the needs of the middlemen rather than those of the people involved in the transaction. These buyers and sellers depend on banks, which have cut-off times and don’t work on weekends or holidays.
There is also no consistent operational process, especially when it comes to international payments, where each country has its own rules, procedures, costs, and timing. Getting around this procedural nightmare can be a full-time job for companies that have to make regular payments to a lot of different people. So, the call goes up again: “Surely, it doesn’t have to be like this.”
The truth is, it doesn’t have to be this way anymore.
BLINC, the real-time payments network of BCB Group, shows that free, real-time, 24/7/365 payments are possible within its network. BLINC can be thought of as a multi-currency fiat “layer 2” network where payments within the network are independent of the traditional banking network and where BCB has built the entry and exit bridges to domestic and international payment rails like SWIFT, SEPA, Faster Payments Services, etc.
BCB’s FX trading desk offers 29 different currencies, including GBP, EUR, USD, CHF, CAD, SGD, and JPY. The BLINC network can be used for all 29 of these currencies. It also gives clients separate accounts in fiat currencies and separate wallets for digital assets.
“The crypto industry is open 24/7, but traditional financial markets and the payment rails that support them are still mostly limited by office hours,” says Ankur Sharma, product director of payments and banking at BCB Group. “The always-on crypto markets must have always-on settlement infrastructure, which is the core problem that BLINC solves at scale.”
All customers of the BCB Group are part of the BLINC network. There are no limits on the size or number of payments, so members are free to choose the settlement model that works best for their business models, whether it’s classic deferred net settlement or real-time gross settlement (on a millisecond scale through BLINC).
Settlement risk is eliminated by the fact that all BLINC balances are mapped 1:1 to cash balances in the underlying bank accounts. This is one of the most important parts of BLINC. All counterparties are confirmed clients of BCB who have passed strict KYC, CTF, and AML (countering terrorist financing and money laundering) checks.
With hundreds of active institutional accounts and thousands of transactions worth billions of dollars, BLINC has already shown that it is useful. From here, BLINC is on track to become one of the most important financial hubs in the Web3 world by connecting to other payment and settlement systems and products.
“We are building a value superhighway,” which is the infrastructure for storing and moving any kind of value, says Ashley Pope, executive director of product, crypto, at BCB. “Being able to make payments right away makes it easier for money to move around and be used in different ways.”
An integrated payments system is made up of four parts: its reach, its limits, its speed, and its trust. On all four of these points, BLINC is a huge step up from how payments are made in the traditional financial world. Again, the crypto industry shows us how to do things better.