What if blockchain’s biggest breakthrough isn’t a new cryptocurrency, but making the financial system dramatically cheaper to operate?
Last week, reports highlighted an interesting comparison from global investment manager Franklin Templeton.
In a test comparing traditional financial infrastructure with blockchain technology, the firm reportedly found that processing 50,000 transactions over six months cost approximately $75,000 using its conventional system.
But using blockchain? Just $1.13. That’s quite a difference.
Of course, these figures relate to a specific test rather than the total cost of operating a financial service. But they raise an interesting question.
Why does moving and managing money still cost so much?
For years, the conversation around blockchain has focused on cryptocurrency prices.
Perhaps we’ve been looking at the wrong numbers.
Blockchain’s biggest contribution to finance might not be changing what we invest in, but dramatically reducing the cost of how we invest.
Traditional finance relies on multiple institutions, intermediaries and systems to record, verify and settle transactions. Each maintains its own records, often requiring additional checks, reconciliation and administration.
Blockchain offers a different approach.
By recording transactions on a shared digital ledger, financial institutions can reduce duplication, simplify processes and potentially lower operating costs.
And this isn’t just theoretical.
Franklin Templeton already uses blockchain through its Benji platform, which provides access to tokenised investment products, including a blockchain-based money market fund.
The technology is increasingly being explored by major financial institutions, not necessarily to replace traditional investments, but to improve the infrastructure behind them.
And perhaps the most interesting question is who benefits from those savings. If financial transactions become cheaper to process, could that mean lower fees, faster settlement and better access to financial services?
Of course, blockchain isn’t automatically cheaper in every situation. Technology, security, compliance and integration still carry costs.
But the potential is difficult to ignore.