Blockchain is transforming everything from payments transactions to how money is raised in the private market. Will the traditional banking industry embrace this technology or be replaced by it?
Blockchain technology has received a lot of attention over the last decade, propelling beyond the praise of niche Bitcoin fanatics and into the mainstream conversation of banking experts and investors.
In September 2017, JPMorgan Chase CEO Jamie Dimon derided Bitcoin: “It’s worse than tulip bulbs,” he said, referencing the 17th-century Dutch tulip market bubble. “It won’t end well. Someone is going to get killed.” Lloyd Blankfein, senior chairman of Goldman Sachs, echoed that thought, saying, “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”
Despite the skepticism, the question of whether blockchain and decentralized ledger technology (DLT) will replace or revolutionize elements of the banking system remains.
And this very loud and public backlash against cryptocurrencies from banks begs another question: What do banks have to be afraid of?
The short answer is “a lot.”