Globally, many central banks are starting to dip their toes in the blockchain industry.
Wait, do banks have toes?
Either way, we know The Bank of England are part of a government led focus group, looking into cryptocurrency adoption in the UK and on the flipside, we know the Reserve Bank of India are trying to smash cryptocurrency out of their agenda altogether. Interestingly, the Bank of Korea are now looking into launching their very own cryptocurrency, with the view to spearhead a new movement within adoption in the area. The long and short of this is, central banks across the world are interested in blockchain technology. It’s a financial asset so it makes sense, right?
According to CNBC, The Bank of America are next to give some input to this debate. Chief Technical Officer of The Bank of America, Cathy Bessant has commented on the problems she has with cryptocurrencies, telling CNBC that:
“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort. In fact [it’s] designed to be not transparent. The way we sort of ‘quote-unquote’ catch bad guys is by being transparent in the financial moment of money.”
Isn’t it interesting how this statement really detracts from the fact that transparency is literally the essence of cryptocurrency?
Clearly, Bessant’s fears here are based around the anonymity provided by cryptocurrencies and not on the fact The Bank of America have no control over transactions. Transparency does not mean anonymity and to be honest, I’m surprised she’s got the two mixed up.
What does all of this mean?
Well of course, as worldwide regulation starts to develop, the US will have an input in this. The Bank of America’s stance seems to suggest that cryptocurrencies aren’t worth the hassle they cause. This of course may not be the case and perhaps their key concern is security? Bessant’s comments don’t give much away, so we can’t gauge the true extent of this, just yet.
If you’re interested, you can read the full report by CNBC, here- https://www.cnbc.com/2018/05/10/bitcoin-as-a-payment-system-is-troubling-bofa-tech-officer-says.html
Overall, Bessant’s comments of course can’t be generalised to fit the opinions of the entire Bank of America, however they do give a good indication of what sort of regulations the bank may impose in the future. Bessant speaks with good authority but her point about transparency seems a little lost? Transparency is not about anonymity, transparency is about data, and suitable management of that data thus making it accessible to all. Anonymity is about protection and liberation. Getting the two mixed up, could prove to be quite troubling indeed.