As financial companies have begun exploring blockchain technology, bitcoin’s promise as a payment disruptor has earned its fair share of skeptics who say the promise has been exaggerated.
In response to these naysayers, Arthur Levitt, Jr., former chairman of the Securities and Exchange Commission, and Peter Smith, CEO of Blockchain, have written a column in American Banker arguing that those who say bitcoin won’t disrupt payments are wrong. They address the key arguments, such as the claim that the U.S. and Western Europe are already well served by existing financial systems, that bitcoin can’t reach areas not served by the Internet, and that there are “last mile” costs for converting bitcoin to local currency.
Existing Systems Sufficient?
In late June, Citi Research released a report titled, “Could the Bitcoin Blockchain Disrupt Payments?” The researchers’ short answer was “no.” One of the main arguments the naysayers was that the U.S. and Western Europe are already well served by existing financial systems.
Levitt and Smith agree that existing payment systems can work well for those within the established system. But for the 2.5 billion