If you are building a car, and you either want the car to be faster or more efficient than ever before, you can do one of two things to it. You can increase the power of the car to make it faster (or lower the power rating to make it more efficient.) Or you can reduce the weight of the car, which usually helps both speed and efficiency. This cause-and-effect approach works throughout many operating systems. People, or athletes, can also be tweaked in this fashion to become faster, or more efficient, or both. Banks can also be trained to be better in this fashion, and organizations like the Euro Banking Association (EBA) see Bitcoin’s block chain technology as something that can streamline the banking industry. If the bank is the athlete in need of the latest advanced training methods, Bitcoin’s block chain technology could be the new trainer they’re looking for.
The EBA Takes a Look into Block Chain Technology
Banks, especially their stockholders, love new streams of revenue. As a former banker, I know that banks’ revenue streams have revenue streams inside. The other side of that is becoming more efficient also saves you money as a business. It’s not how much you make but how much you keep, right? Well, innovations like Bitcoin’s block chain can help banks worldwide do faster transactions, with fewer third-parties to involve, reducing instances of counter-party risk. A streamlined economic process saves time and money, and that is something Bitcoin’s technology does very well and the legacy banking industry is about 50 years behind Bitcoin in doing. So overseers like EBA have gotten to work, creating a crypto-currency report that is similar in vain to what The Bank of England produced last year. This is being done to help the banking industry see what the future potential for leveraging the latest in digital technology, like the advantages of Bitcoin’s block chain.
The EBA doesn’t see greatness in Bitcoin the currency, as current legislation and regulations are several steps behind it, keeping it out of the mainstream of banking finance, for now. Yet, they see it as very relevant in their industry, nonetheless.
“The fact that regulatory institutions in Europe, such as the European Banking Authority and the European Central Bank, have issued reports on this topic testifies to the relevance of crypto-technologies.”
The EBA sees that while it’s time may not be now; it is worth watching and analyzing for the future. And some of its technology will help banking operations right away, upon implementation.
“Apart from possibly being able to speed up processes and reduce their complexity, crypto-technology applications in this area can also be integrated with legacy IT, legal frameworks and existing assets (currencies, stock, bonds etc). Therefore, existing financial services could be ‘powered by crypto-technologies’ offering financial institutions potentially lower costs, better products and faster time to market.”
The EBA has grown over the last 30 years from 18 member commercial banks tenfold, to over 180 banks under its stewardship, so they have quite the sphere of influence in the European banking industry. European banks have shown an interest in connecting with Bitcoin before. As they said, major economic leaders like the Bank of England, the ECB, and the EBA all giving Bitcoin, and it’s underlying technology, a hard look says a lot. Its innovative design and value as a more efficient operating system can no longer be ignored. It is a couple of generations better than what they have on their books, and that is hard to ignore.
Banks aren’t going anywhere, as they have several advantages that being around for centuries brings, but they see that Bitcoin has a new bag of tricks. Think of a bank as an economic sorcerer, looking for a new financial spell to cast over the masses. Or just the ability to execute its current economic spells much better and faster. Bitcoin’s more advanced block chain brain and the banking industry’s massive reach and infrastructure would make quite a quantum leap forward. In an industry that has only created the ATM and the debit/credit card over the last 50 years, it’s about time banking stepped into the 21st century.
This is proof positive that good news travels fast. Bitcoin is great news, but has it fallen into the wrong hands?
Will banking get stronger through Bitcoin, or will a day come when the banks’ spell over the masses is broken, and people realize they don’t need banks to live? Share above and comment below.