Bitcoin Working With Banks
Bitcoin Working With Banks for Mutual Benefit
He is very bullish on the core technologies and inventions that underpin the Bitcoin network. He sees a bright future if banks, bitcoin financial companies, like iceCUBED, and governments work together, for mutual benefit.
In an recent interview he Mr. Levchin noted that it’s “[…] a very interesting time, where I think the technology is awesome […]” he is “[…] confident that there will be a form of settlement that will be a crypto-currency.” It is the technology that excites him the most. He notes that the “ledger piece, there’s no need to reinvent that. The bitcoin distributed ledger is a fundamentally sound idea and it will get used […]” in some form or other.
The best chance for the use of this distributed ledger technology is if the existing banking system embraces the competitive advantage it provides.
He is most hopeful and bullish about the prospect of some distributed ledger technology, with government backing, winning this space. The first stage would be for banks and financial companies in the space to work together, to create truly useful and innovative solutions.
The issue is that making even local bank transfers in even the developed world can costs a lot. In the EU for example, the annual burden on consumers is estimated to around EUR 120 billion to move money around. A lot of this cost comes from the need to manage fraud and all the thousands of consultants and suppliers that are needed to maintain the system.
Here in lies an opportunity for the banking sector and Bitcoin financial companies. The banking sector is having its potential profits chewed up by the expensive burden of its archaic infrastructure. Yet companies like iceCUBED are using this new payment system and technology to provide a highly cost-efficient and secure way of making payments, without the risks and associated costs of fraud.
This is why iceCUBED is committed to working together with the banking sector in Africa. It is Darwinian, the businesses that collaborate and improvise most effectively always prevail.
The opportunity for both the banking sector and financial service companies like iceCUBED is real and extraordinary, like we have never seen in history.
The Federal Reserve Bank of St. Louis in the United States held a conference specifically on Bitcoin this March. Here they analysed the technology from a banking and economic viewpoint.
The conference was entitled ‘Bitcoin and Beyond: The Possibilities and the Pitfalls of Virtual Currencies’. The key presentation was by David Andolfatto, the Vice President of the St. Louis Fed and a professor at Simon Fraser University.
Mr. Andolfatto is convinced that these new systems and technologies will bring great change in the banking and payments sector. Mr. Andolfatto was very candid in his final analysis, noting that: “The threat of entry into the money and payments system […] forces traditional institutions to adapt or die.”
Bitcoin is a global and inexpensive clearing network. It works very well. Financial companies like iceCUBED are emerging that can facilitate payments in other currencies and assets over the network. By working with these companies banks will be the primary beneficiaries of Bitcoin. In the process banks will save billions by drastically reducing costs.
Furthermore, banking customers already hold cards with chip technology. There is no reason these could not be integrated with Bitcoin and Bitcoin-like payment technologies. It is easy to imagine a card that contains a client’s certified private keys and can do crypto-calculus.
Bitcoin and blockchain based technologies can and will transform the current payment infrastructure. According to the Federal Reserve Bank of St. Louis (U.S), the change is as certain as the end of those who do not embrace it.