Although it may seem like one of those Saturday Night Live news, a blackout in a Mexican office took the country on a 50-year journey back in time when there were no credit or debit cards.
According to a report by the Mexican newspaper El Financiero, a power failure at a Prosa's Data Center located in Santa Fe caused many of the country's credit and debit cards not to be accepted by any merchant or ATM.
Prosa is one of Mexico's leading payment processors. According to official statements, the problem had its peak during the morning of August 10 and lasted throughout the day.
This is The First Time in The History of Mexico that a Blackout Leaves the Whole Country Unable to Transact
According to multiple reports, customers tried to pay with their credit and debit cards, and transactios were impossible. Sources acknowledged that "this is the first time that there has been an affectation of this magnitude, as no similar problems had occurred in the past, but immediately they notified the Bank of Mexico, as well as the National Banking and Securities Commission."
Banorte, HSBC, Invex, Santander, Scotiabank and Banjército were some of the affected financial institutions. BBVA and Banamex —the country's largest banks— stated that they had no failures as they didn't specifically use the company's services, but when their cards were used at the affected banks' POS, they were obviously rejected.
Prosa issued a statement informing that they were able to solve the problem in the late afternoon, without clarifying whether they took measures to prevent this situation from repeating itself.
This almost impossible situation for today's standards is a reality that many times is not considered by the average citizen. The centralization of financial services entails many risks associated with the granting of much power to a single entity.
Blockchain is Helping Fight The Dangers Associated With Centralization on Traditional Finance
In the event of a major failure such as the one that occurred in Mexico, it is relatively easy to collapse the financial system of a specific country. In fact, there is no need for a power failure; it is enough to attack a link in an excessively centralized chain to inflict severe damage to the way a country conducts its business and transactions.
However to counteract this type of situations, blockchain technologies have offered reliable and very innovative solutions, not only the well-known DeFi developments allow systems to operate without the fear of a threat to a single or limited number of servers, the use of blockchain technologies has allowed some countries to escape the difficulties associated with traditional financial sanctions.
For example, Iran, Venezuela, the Marshall Islands, and China are already evaluating the use of blockchain technology to carry out transactions without using the SWIFT system. Saudi Arabia is also exploring the use of Ripple Technology (xRapid) to facilitate international transactions without the limitations of the traditional economic system and Swiss-based Dukascopy Bank has also released its own cryptocurrency.
The higher the decentralization, the more difficult it is to generate a global failure that collapses an entire system. It is enough for a node to remain operative for a network to guarantee its existence.
In a world where centralization entails so many risks, blockchain technologies are presented as the best solutions to promote an evolution of the whole financial system.