As blockchain technology evolves from hype to practical applications, the reality that banks (among many other middleman businesses) could become less relevant to the future of financial transactions has not been lost to those same stolid institutions.
In brief, blockchain offers the opportunity to transact finance faster, more transparently and less expensively than the services banks provide. In fact, technically speaking, banks are not required. Hence traditional banks have not been primary participants in the massive global movement of cryptocurrencies in the past few years. In that light, the reality that traditional banking, as an industry, is at risk in the not-too-distant future is more real than at any point in the past.
Highlighting the point is The Financial Times reporting that JPMorgan has widened blockchain payments to more than 75 banks.
The article states that, “More than 75 of the world’s biggest banks are turning to blockchain to fight the threat of new payments rivals in what will be the regulated banking industry’s largest application of the distributed ledger technology underpinning cryptocurrencies.”
None of this would surprise those familiar with blockchain tech. But it might be surprising to those who don’t follow such developments that all the good, bad and ugly surrounding Bitcoin has real-world implications.
For all of us, our options for transacting value should continue to increase even more in the future. Simultaneously, traditional banking should become less expensive.
Although it’s hard to envision a world where traditional banking will go away, it’s also conceivable that an all-out legal battle will ensue to mitigate loss of money and power that banks and their government partners have long enjoyed.
I would expect the blockchain circus to move from the hype of speculative irrationality to the world of courts and jurisprudence at the same time as blockchain starts to take steps towards the disintermediation of the legal profession.
We live in interesting times.