“Cryptocurrencies and Blockchain could destroy outdated banking sector”

Feb 11, 2022

With ASKAR SHEIBANI

CEO, Comtek Network Systems and chair, DBF


Blockchain is a revolutionary innovation just like the internet. It is the backbone of digital/cryptocurrencies such as Bitcoin.

It is extremely secure, robust against fraud and cheap to run.

Blockchain technology could be applied to improve various other types of processes besides finance.

It is super-efficient, low cost and will wipe out expensive bureaucratic barriers from our lives.

Many experts believe Blockchain will have a more radical impact on our lives than the internet did.

I am going to concentrate on its transformative and disruptive impact on the financial sector in this article.

Blockchain technology was developed just after the dramatic failure and collapse of the banking sector in 2008. It is now creating a cashless decentralised financial sector.

When we send money from one account to another or change currencies to purchase goods, there is always a middleman we have to go through.

Middlemen, such as banks, delay the processes, create costs and are open to corruption. Blockchain-based digital currencies have no middlemen and all transactions are transparent between the parties; just like if you give someone £10 cash without going through an intermediary such as a bank.

Right at the beginning of this revolutionary invention, many refused to take this innovation seriously and were very sceptical about its success and impact.

Many governments, central banks and financial institutions were vigorously against the creation of cryptocurrencies, and considered its success as a threat.

I believe most disruptive innovations are a threat to the status quo any away. The biggest threat of cryptocurrency is against the US dollar.

As cryptocurrencies become more popular, they could replace the US dollar as the new global currency.

Some countries have already adopted Bitcoin as their national currency. Some large forward-looking companies such as PayPal and MicroStrategy have also adopted cryptocurrency in their businesses.

The number of digital currency transactions is increasing exponentially on a global level.

This is a revolution invented by people to keep control of their own finances. The governments, central banks and the traditional finance sector will never be able to stop this revolutionary innovation from spreading all over the world.

As people are getting more educated about the ease and benefit of crypto currencies, they are loving it.

Digital currency is already very popular amongst young people. Some 58% of the investors in cryptocurrencies are under 34 according to a survey in 2021.

The reality is that the biggest losers from this innovation will be the traditional banks and the corrupt governments.

Besides governments, the global banks hold the biggest power on our finance and economy.

I, therefore, believe that as soon as they realise the enormity of the danger they are under, they will try to join in and reluctantly adopt and accept the inevitable blockchain cryptocurrencies within their business.

The governments and some central banks have already woken up to the reality and are now gearing up to roll out their version of cryptocurrencies and devise a system for their tax collections.

The adoption of blockchain technology by the banks and the government will naturally create a more efficient and much cheaper finance sector that will benefit the citizens.

The crucial difference between the digital currencies introduced by the banks and the governments is “who is in control”.

The people’s cryptocurrencies are not centralised and therefore no one has control over the users or investors.

The digital currencies rolled out by the government and the banks are centralised and therefore banks and government will still have their full control over the investors and users.

The fact is that this innovation and revolution is no longer stoppable. I, therefore, believe that it would be a smart move for the Welsh Government to spearhead and adopt this blockchain innovation and promote it within our education sectors.

Speedy adoption of great innovations such as blockchain and gigabit-speed internet in Wales would send a loud signal to the world that Wales is a welcoming hub for innovation and innovators.

The Welsh government should also try to deploy the blockchain technology where possible within its own government processes and the Development Bank of Wales.

Blockchain and cryptocurrency are here to stay. Those who welcome it and adopt it will survive and succeed, and those who ignore it will be left behind and fail.