Blockchain is likely to change the world of finance, taking on some of the functions banks execute today. Which does not make it able to replace banks entirely, the head of Bitcoin Foundation believes.
In an interview to CNBC Brock Pierce claimed that the worries about blockchain's posing a threat to traditional banking system are premature, since the technology can only substitute banks in the fields where they are not a “value-creator.” According to Pierce, there is a wide range of financial services which blockchain will by no means intervene into.
The fact that the introduction of blockchain into the existing banking system will take quite long cannot be ignored either, he said, noting that customers rarely change their habits that quickly.
Apart from the negative effects bankers are currently frightened by, blockchain has all the capacity to bring added value to their businesses, claimed the head of Bitcoin Foundation without delving into details on how exactly blockchain might help.
As of today, notwithstanding the fears, perspectives brought to the banking sector by blockchain are to a large extent acknowledged by banks themselves, especially by the major ones that have teams focused on the possible implications of the technology. A number of important players have started looking into the subject three or four years ago, added Pierce, noting that those were the times when blockchain was far from entering mainstream.
The benefits blockchain might bring to banks have been recently voiced by the CEO of Digital Asset Holdings Blythe Masters. She claimed that, cutting post-trading process costs for as much as 30-40-50%, the technology could allow banks focus more on innovation.
Masters added that nowadays no bank can be sure that the information distributed between parties is perfectly identical, which makes it necessary to spend much money on reconciliation. With distributed ledger, the problem can be solved, she said.
Pierce's statement came out in view of the concerns expressed recently by Andrey Sharov, the Vice President of a Russian major bank Sberbank, who argued that blockchain would eliminate banks entirely in a decade.
Earlier Barclays claimed that blockchain would “reduce the capital requirements of banks, as it would reduce considerably the counterparty risks.”
Andrew Levich
