The banking industry has demonstrated mixed feelings for the innovative new payment system Bitcoin. By-and-large bitcoiners have had issues assimilating into the legacy banking system. Most recently, however, one big banker had very positive things to say about the technology.
The CIO of Swiss Bank (UBS) recently stated that he believes that the Blockchain – a technology at the center of Bitcoin – has potential to most disrupt the financial services sector.
As Bitcoin’s open, decentralized online ledger, which is important for verifying transactions, the Blockchain and Bitcoin have received much attention from pillars of high finance. Just this past September the Bank of England saw the technology’s potential as a “significant innovation” that could have “far-reaching implications.”
“I believe – and this is my personal view – that blockchain technology will not only change the way we do payments but it will change the whole trading and settlement topic,” said Mr. Bussmann.
He believes that blockchain technology has potential to trigger “massive” simplification of banking processes and cost structure.
He said: “When somebody with a strong brand and security level establishes it as a reliable service, then the whole industry will follow. That is my personal prediction.”
UBS is a world’s leading wealth manager, with $1.96 trillion of assets under management, according to research from London-based consultancy Scorpio Partnership.
While UBS’ CIO remains positive over the technology, others are less so. Recently two major Norwegian banks have announced they will no longer service Bitcoin companies, with Bitcoiners receiving letters that their accounts would soon be frozen.
JP Morgan Jamie Dimon CEO has a similar view of Bitcoin as the Norwegian banks.
“It’s a terrible store of value,” said Dimon of Bitcoin. “It could be replicated over and over.”
Regulation doesn’t bode well for Bitcoin.
“It doesn’t have the standing of a government,” added Dimon. “And honestly, a lot of it — what I’ve read from you guys — a lot of it is being used for illicit purposes. And people who will get upset with it is governments. Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it’s almost impossible to do with something like that.”
But Dimon doesn’t think Bitcoin will go away completely.
“They will eventually be made as a payment system to follow the same standards as the other payment systems and that will be probably be the end of them,” he said.