Bitcoin and Banks – The Race Is On

In 2008, an individual or group writing under the name of Satoshi Nakamoto published an open source program outlining the Bitcoin protocol. It ushered in a new era or peer-to-peer data exchange, providing a financial infrastructure that no longer depends on central institutions, specifically banks.   

Over the years central authorities have reacted cautiously to what was then an unregulated exchange of value. Banks issued warnings to consumers regarding the currency driving the new standard. In 2013, during a period of unprecedented bitcoin price highs, the Bank of France released their opinion on the risks related to the digital currency.

– The Bank of France

The mainstream media’s focus on the illegitimate aspects of the digital currency industry detracted from the new financial paradigms potential. Now banks are turning their heads, shaking off the dust and experimenting with a range of bitcoins features.

Blockchain transactions are faster, cheaper, and globally accessible. The French bank and financial services company BNP Paribas, which claims to be “the bank for a changing world”,  recently released an article explaining the benefits of disrupting the legacy banking systems, in their magazine Quintessence.

In the article, written by Research Analyst Johann Palychata, two scenarios are outlined. “In its purest form, a distributed blockchain system allows all market participants direct access to the DSD (Decentralised Securities Depositary), to the exchange and to the post trade infrastructure (clearing settlement).  If this setup develops then existing industry players might be redundant.”

The second, explains Palychata, is integration with the post trade infrastructure. “In this scenario custodians or settlement infrastructures might use the

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