The rise in Bitcoin adoption and companies offering Bitcoin-based payment products is not going to affect the conventional payments industry anytime soon. The leading players in payments industry will continue to enjoy their dominance, states a recent report by Citigroup.
The report, released a couple of days ago analyzes both payments industry and the digital currency industry to conclude that Bitcoin is not a threat to the likes of MasterCard and Visa. However, the report does not dispute the fact that the use of blockchain technology will open up markets for financial services, helping them reach new customers.
Bitcoin and Existing Payment Solutions
Bitcoin currently has a market capitalization of over $10.8 billion, making it strong enough to be taken seriously by the banking and financial services industry. Many banks and financial companies consider the digital currency to be a threat. However, the current state of bitcoin payments leaves much to be desired. The Citigroup considers Bitcoin to be a successful proof of concept for decentralized peer-to-peer fund transfer and payments network. According to the report, the only benefit offered by the Bitcoin network over existing payments solutions is anonymity (let’s make it clear that bitcoin transactions are pseudonymous at best).
While Citigroup dismisses