Blockchain Investment in 2016 Hits US$290M as Banks Accelerate Development

The blockchain sector is expanding well beyond its financial services origins. Developers and investors increasingly explore applications in digital identity verification, property ownership systems, and machine-to-machine transactions. Perhaps nowhere is this promise more tangible than in international remittance corridors, where the technology could fundamentally reshape economics for money senders.

The remittance market itself represents enormous value. During 2015, money flowing across borders totaled $581 billion globally, with developing nations receiving $431 billion of that sum, according to World Bank figures. Blockchain-enabled platforms could allow service providers to dramatically undercut conventional pricing structures, potentially achieving the World Bank's 3 percent cost target far more reliably than existing players.

Traditional financial titans have noticed. Major institutions including Santander, UniCredit, UBS, ReiseBank, CIBC, National Bank of Abu Dhabi, and ATB Financial have either tested or deployed Ripple's blockchain infrastructure. Beyond immediate cost advantages, blockchain settlement systems promise to shrink processing windows, eliminate transcription errors, and boost verification certainty—benefits a World Economic Forum report from the previous month detailed extensively.

Yet enthusiasm requires tempering. Juniper Research's Windsor Holden cautioned that each use case demands "rigorous and robust testing" before implementation. Smart contract architecture particularly demands attention; careless programming creates attack vectors that prove catastrophic. The June episode surrounding The DAO illustrated this risk starkly. The decentralized autonomous organization, designed to fund early-stage Ethereum initiatives through collective investment, fell victim to a breach that drained $60 million in ether.