Banking institutes across the world are either jumping on the cryptocurrency industry bandwagon or recoiling in horror that someone dares challenge their monopoly on currency creation. A former JP Morgan executive this week pointed out that banks already know that crypto could possibly change the world as we know it and may be too large to react to the changes.
It seems that at some point in the near future banks will have to adopt the tried and tested ethos of “if you can’t beat them, join them.” Some traditional financial institutes have been playing the old “head in the sand” game for too long and are coming around to the potential of the cryptocurrency industry.
Bankers losing the race against the cryptocurrency industry
The game is almost up and the bankers know this. Salvador Casquero, who is the former JP Morgan head of Scandinavian Interest Rates Trading and Head of FX Sales at BBVA, which are two of the largest banking institutes on the planet, recently stated that banks have lost the race against the cryptocurrency industry and the rapidly emerging fintech companies.
The likes of Goldman Sachs, JP Morgan, Citibank, and BBVA have been dominating and controlling vast parts of the financial system for eons, but times are changing. For many decades, the only way people could process transactions internationally was through these major institutes, who had a real stranglehold on the market.
The game has changed with the rapid growth of the crypto markets and the services offered by new startups and fintech companies. The reshaping of the financial world is already here and banks are now clamoring to catch up.
Crypto is changing the financial world
In recent times, JP Morgan released a report that explored the key areas that central banks need to understand in order to adopt crypto.
The report talked about how the anonymity of the cryptocurrency industry posed a real threat to the banks and that increased volatility in regards to regulations and technology is a major issue. They believe that crypto does not function within the old definitions of money. It pointed out that in order for it to be deemed ‘real money’, crypto needs to become a unit of account, a medium of exchange and a storage of value. We can rest assured that it was the likes of JP Morgan that originally defined what it is to be money in the first place.
Although the fluctuating prices of crypto are a problem because of the limited supplies of the coins, the industry might fail to compete with established fiat currencies in the long run.
Salvador Casquero commented on the situation by saying that through his “experience in the industry and knowledge of how fintech companies work, the unexpected technology we have seen in the cryptocurrency industry has unsettled the banks. These major banking establishments were controlling mass sections of the economic stratosphere and are now competing with small yet dynamic crypto and fintech firms that are revolutionizing the flow of resources, business models and also technology that are geared towards specific products.”
In short, it is very difficult for large and gluttonous banking institutes to compete with the smaller companies in the cryptocurrency industry that are now dictating the direction of the economic world. Only time will tell how they adapt to crypto because crypto is not going to adapt to them.
I am very experienced writer/blogger who has been an active member of the cryptocurrency community for several years. I have experience writing for crypto news sites and proactively been involved in the startup of other ICO and crypto ventures over the course of the past four years.