Why Blockchain Won’t Disrupt Banks First
As two people who have been working closely with blockchain for a while now, we have no doubt about the technology’s potential to radically transform the financial industry. A far better way to build and maintain interconnected ledgers – the heart of the financial system – it seems predestined for the job. But while banks and FinTech companies around the world are busy developing blockchain-based solutions, we are likely to see blockchain “go live” in other industries first. This is something of a paradox, and so we think worth a closer look. Regulation, regulation, regulation. As Oliver....
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According to law experts in South Africa, most banks are scared of blockchain for its power to disrupt their sector. A Senior Associate at Norton Rose Fulbright in Johannesburg, Nerushka Bowan, said the adoption of blockchain among banks has the potential to disrupt the global banking industry. Using the blockchain technology and its digital distributed ledger to confirm batches of transactions just as it does for bitcoin, it can take over functions such as verifying payments. She added that though banks are a trusted intermediary for the exchange of funds, they will be cut out once the....
Banks didn’t plan for the blockchain. It just happened in front of them in 2015. But, they have been thinking a lot about its implications. 2015 was the year that banks started to wonder about their blockchain strategy. Banks that didn't have such a strategy were considered laggards. But despite its revolutionary prognosis, the blockchain doesn't signal the end of banking, because the banks aren’t going to use it to disrupt or obsolete themselves. Rather, they will guide it to live within the regulated constraints of their world. The good news is blockchain implementations help banks....
Citi Research released a 56-page report on bitcoin saying that it is not going to disrupt banks or credit card networks. It says there will be increased transaction costs for bitcoin to provide increased volume. As for the use of bitcoin in remittance payments, it says bitcoin’s advantage dissipates when the “last mile” cost of converting to fiat currency is considered. The report notes the growth of bitcoin mobile apps in developing countries but sees regulations rising that put them in question. It claims existing payment systems are generally efficient. The report also talks about....
Blockchain technology proponents are staking claims in Africa, paying special attention to banks. Six African banking institutions are making sure financial tech doesn’t disrupt their businesses by working together to connect their systems with distributed ledgers. Absa & Barclays Africa Testing Multiple Platforms Across the South African Region. One....
Digital currencies could disrupt the ability of central banks to exercise control over the economy or issue money should the technology scale, the Bank for International Settlements (BIS) said in a new report released today. The BIS, a financial entity cooperatively owned by the world's central banks, said that it has been looking at the technology as early as November 2013, and in February of this year the Committee on Payments and Market Infrastructures (CPMI) asked a working group to draft the report it published today. The report outlines how digital currencies like bitcoin as well as....