Distributed Ledger Technology (DLT) has received a mixed reaction from the established financial system. At first, there was little attention paid to bitcoin, let alone blockchain. When the massive rally hit bitcoin prices last year, there was finally some dialog about cryptos and DLT emerging from the financial world.
Regrettably, the reception that DLT got was icy. Many called it a scam. Others talked about how it had no intrinsic value. Both of these ideas could be directed at the existing central banking system’s product, which is fiat currency.
Part of the reason why DLT may be taking so much flack from the established financial system is that its foundations are diametrically opposed to fiat currency and a centralized settlement infrastructure. In fact, DLT technology undermines centralized record keeping across the board.
DLT changes everything
For the moment, governments and banks have the ability to direct the global economy because of the hand-in-glove relationship that fiat currency and centralized power structures create. Central banks are in no way independent, and major governments use their ability to politicize the financial system in order to further geopolitical goals.
The monetary policy that came in the wake of 2008’s meltdown is proof enough of this, but if other examples are needed, one need no look any further than Greece or Russia for more evidence of how fiat money, centralized control, and highly biased legislation favors the benefits of the few, over the needs of the masses.
DLT technology is a departure from centralized control structures. It is perhaps the first technology in human history that eliminates the need for trust. Although it is a young technology, the ability that DLT has to completely change how people interact should not be underestimated.
No more centralized banking system means a lot more than lost profits, it means that the power to create money no longer rests in the hands of the privileged few. Losing this position is probably not lost on the people who currently run the global central banking apparatus, which is probably why there is so much animosity coming from their propagandists.
Buying the back-door in
The real problem for the established banking system is that it is, in theory, still based on a market economy. As the recent deal between the Litecoin foundation and TokenPay demonstrates, it is possible for well-funded crypto companies with valuable IP and name recognition to enter the banking sector by force.
The Litecoin Foundation traded an agreement to help TokenPay with various activities for a 9.9% interest in German bank WEG AG. Litecoin founder Charlie Lee had this to say about the acquisition, “This partnership is a huge win-win for both Litecoin and TokenPay. I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin. I’m also excited about Litecoin’s support in TokenPay’s eFin decentralized exchange.”
Going to the next level
According to numerous reports, TokenPay is working to acquire another 9.9% of WEG Bank and has options that would allow it to take over a controlling interest in the company. Regulatory approval would be needed for that acquisition to take place.
Depending on how badly the powers-that-be in the banking world want to impede the spread of cryptocurrencies, the takeover of WEG Bank by TokenPay and Litecoin may hit some political hurdles.
The writing on the wall is clear; cryptos are coming into the mainstream financial system. The only question is how much of a fight is the established system willing to put up in order to subdue the DLT revolution by legal maneuvering and political manipulation?
Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology.