Blockchain Remains King as Banks Lose Interest in ICOs, Crypto

Pexels.Com

EXCLUSIVE–The potential use cases of blockchain technology in banking continue to captivate bankers, but topics like cryptocurrency and Initial Coin Offerings, or ICOs, may be losing a bit of their edge.

This is according to a panel on the subject during Bank Innovation 2018, which wrapped up yesterday in San Francisco. Speakers on the panel, including Dan Rosen, founder and general partner at fintech-focused venture fund Commerce Ventures, noted that ICOs might not quite overtake traditional methods of investing just yet.

“Does anyone here [in the audience] not think that ICOs are in a bubble?” Rosen asked during the panel, highlighting some of the traditional fears that bankers have expressed surrounding cryptocurrency (which, it is worth noting, has slumped a touch since reaching record highs near $20k this year and in 2017).

This could have interesting consequences for areas like Singapore as regulators crack down on the investing method across the globe, the panel noted.

Even cryptocurrency itself is losing a bit of its charm for banks, according to the panel. Rosen, along with other panelists, noted that the endless possibility of forks in some cryptocurrencies leads to “higher risk and less willingness for FIs to adopt.”

Blockchain, however, will continue to capture the banks’ attention, though it might be a while before banks themselves move from proof-of-concepts into actionable projects using the technology, though some institutions like Standard Bank–where fellow panelist Ian Putter is currently serving as head, unified finance development and innovation–could be the exception.

Standard, which is Africa’s largest bank, is currently utilizing blockchain across several areas of its banking infrastructure, Putter noted on the panel.

As banks move away from ICOs, they might also move away from other projects that prize decentralization: even with the focus on blockchain, very few banks are relying on, or will be relying on, public blockchains.

This is according to Marley Gray, principal architect, Azure blockchain for Microsoft, who also spoke on the panel .

“Public blockchains are [like] the Wild West–trust no one,” Gray said on the panel. Microsoft is currently running its own blockchain platform, Azure.

4 - Readers Like This Post