While currently Bitcoin and blockchain technology, in general, is considered to be unable to compete with the financial giants, this fact may change according to MoffettNathanson analyst Lisa Ellis.
In the developed world, Bitcoin and other cryptocurrencies do not play a significant role in everyday life. Other countries around the world have deep-rooted issues within their financial systems. Especially for third world countries, where banking services (among other things) are a rarity, cryptocurrencies have found authentic use in the life of individuals.
However, technology keeps spearheading forward. Blockchain is maturing rapidly, and is expected to attract $2.9 billion USD in investments in 2019 alone. Financial institutions are a majority contributor in the above-mentioned figure. Their contributions are expected to amount to more than 40% of the entire expected investment.
These facts show that the banking and payments businesses are taking blockchain seriously, and potentially as a threat.
According to Ellis, blockchain technology will soon become better than banks in security and transaction capabilities. At the same time blockchain fosters the spirit of freedom of money. Banks and private institutions are likely to suffer significant blows unless they also adopt cryptocurrency and blockchain.
Last month, JP Morgan Chase announced that they will be releasing a cryptocurrency for their corporate clients. The press and crypto community reacted strongly to this piece of news. Financial institutions are definitely looking at blockchain as either an opportunity or a threat.
Blockchain technology is poised to overcome the current scalability and legal issues that are preventing it from moving forward. Once that happens banks and money processors will be in danger of losing their importance and customer base to mainstream adoption of decentralized solutions.
What do you think?
Will banks be able to overcome the increasing challenges being thrown by the cryptocurrency ecosystem, or will they crumble when their greedy fingers realize that blockchains are difficult to monetize?