Former JP Morgan Executive says Banks know there’s Nothing to do Against Cryptocurrencies.
The rise in cryptocurrencies and blockchain technology has affected banks and financial institutions the most. A former JP Morgan Executive, Salvador Casquero, believes this and said that banks have officially lost the battle against the cryptocurrency and fintech start-ups.
A few months back, JP Morgan had released a special report exploring the key considerations for central banks in adopting cryptocurrency. As per the report, due to the anonymity of cryptocurrency transactions and the increased volatility around technology and regulation, cryptocurrencies, in their current state, generally do not function as money under economists’ definition of money, which is: (i) a unit of account, (ii) a medium of exchange, or (iii) a store of value. The fundamental problem seems to be the limited supply of cryptocurrencies because of which the value of cryptocurrencies tends to fluctuate massively. Hence, existing cryptocurrencies are unlikely to compete with established conventional currencies.
Salvador Casquero commented,
“From the ‘-tech’ suffix I witnessed how fintechs, unexpected technology competitors with financial flavour, started to unbundle the banks. Banks were doing a lot of things at a single given time and they found themselves competing with small, fast and flexible companies which were optimized in terms of flow, resources, business models and technology and are tailored towards very specific products.”
Banks like JP Morgan have been an important catalyst in the financial system all over the world. Cryptocurrencies and blockchain technology are now reshaping the financial world due to the growth of new fintech start-ups.
Casquero further explained that cryptocurrencies do not need central banks, institutions or governments for them to keep working. And this is something that banks already know. Another point is that Bank of America and JP Morgan said to their investors and clients that if they do not invest heavily in new technologies and innovation they might lose an important market in the financial world.
Several banks like Santander Group, Argentina-based Banco Masventas, and JP Morgan are already working with blockchain and cryptocurrencies. Banco Masventas process international transactions using the famous virtual currency Bitcoin.
Follow us on Telegram!