There is no question that Bitcoin is causing a lot of worry and hand-wringing in the banking sector — and in national governments uncertain of how to regulate it. It is, after all, a highly disruptive technology — one of very few alternatives the world has seen in centuries to creating and handling money securely and efficiently outside of the government and the bank.
Bitcoin’s implementation effectively creates decentralized trust, which is the main asset banks sell, and it challenges the money minting monopoly of national governments.
Regulators and players in the banking sector at first ignored Bitcoin. Many predicted its demise sooner rather than later. However, that has not happened yet. Instead, as time has gone by, it has become apparent that Bitcoin poses a danger to the status quo of money.
Regulators and the banking industry have now realized they can’t ignore the technology — they have to face it and manage it somehow. But, because Bitcoin is decentralized, the traditional ways banks have of dealing with a competitor, such as lobbying for unfavorable legislation or even intimidation, won’t suffice. They’ve had to look for new ammunition. And blockchain is the defensive weapon they’ve found.