As Blockchain Transforms Payment System, Get Exposure With This ETF

Whether it’s because of cost-effectiveness, security, or transparency, there’s a myriad of reasons that blockchain technology will continue disrupting the payments system.

The rise of cryptocurrencies has already spurred retail consumers into exploring digital currencies as a form of payment to carry out daily transactions. The underlying technology of cryptocurrencies, blockchain, will offer ways for developers to tweak the tech in order to create more ways to disrupt payments systems around the globe.

“People can use blockchain to send money across the world as they would for transferring cryptocurrency to one another,” Finance Monthly explains. “For example, companies like Stellar and Tempo offer 1:1 backed fiat tokens (also called stablecoins) that individuals and companies can convert their government-issued currencies into and send via a blockchain. The receiver can then accept the digital currency and convert it back into their own currency.”

Companies are already integrating the use of blockchain technology into their core business operations. Financial payments company PayPal, for example, is already allowing its users to utilize cryptocurrencies for purchase transactions.

Another area where blockchain shines is in payments from one country to another. No need to convert one fiat currency to another, as digital payments can stay uniform with cryptocurrencies.

“This type of system allows people to enjoy the benefits of blockchain-like more secure and transparent transactions,” Finance Monthly adds. “It, therefore, has significant advantages over conventional cross-border payments, which are often costly, slow, opaque and dogged with security issues.”

“Because of a lack of standardisation between countries, transfers tend to require a number of intermediaries to carry out tasks like verifying a sender or receiver’s identity and creditworthiness,” Finance Monthly adds further. “This is not only time-consuming but adds extra costs. What’s more, these transactions often take place on outdated legacy systems, potentially rendering those involved vulnerable to security breaches.”

Capturing the Payments Revolution in One ETF

One way to capture this payments revolution is via the Global X Blockchain ETF (BKCH). BKCH seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Blockchain Index, which is an index that is designed to provide exposure to companies that are positioned to benefit from further advances in the field of blockchain technology.

Overall, BKCH gives investors access to:

  • High growth potential: The global blockchain solutions market is expected to increase more than 50% from 2020 to 2021.
  • Global tailwinds: Blockchain technology is a global theme, poised to benefit as governments and industries seek to improve the accuracy, transparency, and security of financial transactions.
  • An unconstrained approach: This theme is bigger than just cryptocurrency. BKCH invests accordingly, with global exposure across multiple sectors and industries.

For more news, information, and strategy, visit the Thematic Investing Channel.