With increasing numbers of financial institutions investigating the opportunities for streamlining and innovating infrastructure through the use of blockchain, what effect on the banking industry itself will such a widespread shift to the new technology have? While much thought and opinion has been given on the topic of the future of digital currencies, they are intrinsically linked to the future of banking. Now we look at how the banking industry will change due to blockchain technology and whether that opens up new opportunities for all digital currencies
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Understandably within the digital currency industry the focus on the future is generally about how cryptocurrencies can integrate into the monetary system for a wider audience and become a regularly used, easily accessible means of payments and receipts. There is another aspect to this however and that is the current Fiat banking system. Will it be affected by such a significant change in economic activity across the globe and if so, what kind of changes?
Interestingly it has been discussed by several within the banking industry itself, most recently by the Vice President of Sberbank, Russia’s biggest bank by assets and the third largest bank in Europe, Andrey Sharov. His recent speech laid out the issues starkly, claiming that distributed ledger systems and peer to peer lending will see the banking industry itself significantly reduced in size. While some of his views have been passed off as doom mongering (he did mention he would have nowhere to work in ten years), the view that the banking industry is facing a dismal future is backed up by former Barclays Bank CEO Anthony Jenkins. In 2015 he gave a speech on a similar topic in which he envisioned the banking industry to lose between 20% and 50% of its staff levels in the next decade.
These views are interesting, not least because these members of the banking community seem to have a more positive view of blockchain than many within the cryptocurrency industry itself. Here we see acceptance of the paradigm shift towards blockchain throughout the global fiat currency industry, and indirectly highlights a brighter future than many seem to think for digital currency technology.
Blockchain is forging ahead in terms of practical application and acceptance, that much is clear, what the industry must be vigilant about is ensuring that the digital currency itself does not get left behind. Blockchain use throughout the banking industry is a welcome change that could revolutionize not just the financial industry but the entire concept of currency and transactions. It is vital that cryptocurrencies are let at the forefront of that revolution.