Marcel Cassar, the new Chairman of the Malta Bankers Association stated this week, that blockchain technology is a “bankers dream”. He also added that he believes cryptocurrencies are here to stay.
It seems that Cassar believes that the banking industry has a duty to keep up to date with the fast-past nature of the digital word, and it should move to embrace new technologies instead of shunning them. He compared the present ecosystem to “rush hour gridlock trapping an F1 car”.
Cassar added; “Going by our experience of technological innovation, a blockchain revolution of business and government could still be years away because many barriers would need to fall in the meantime.”
He also stated that he believes blockchain is a foundational technology that has the power to create new platforms for both economic and social infrastructures. He also distinguishes between cryptocurrencies and payment technologies; “the currency is the ‘what’ while the payment technology is the ‘how’.”
He then brought up the still unanswered question of how we should be defining cryptocurrencies and seeking to regulate them, adding that he sees them as no short or medium term threat.
“But what it means for banks is that their traditional role as main payment intermediary for funds and currency transmission will become challenged, if not obsolete.”
Whilst Cassar notes that cryptocurrencies can be risky due to their connection to money laundering and of course, their volatility, he still thinks that they are “here to stay”.
Malta has been renamed “The Blockchain Island” due to their welcoming government, their crypto friendly laws, and the set up of several large cryptocurrencies in the country. Exchanges such as Binance, BitBay and OKEx have all announced their intention to relocate to Malta and the government have just enforced three new bills designed to fully regulate the sector.
Just last week, Binance announced that they had managed to open a bank account on the island meaning they would be able to offer crypto to Euro exchange. Cassar commented that whilst it is an area of unknown and unprecedented risk for the banks, this doesn’t mean it isn’t possible.
“We need to be sure of what enhanced risk management and compliance capabilities the banks are putting in place because there are also other important linkages that need to be protected, among others our correspondent banking networks which still see these technologies as new and susceptible to risk of criminal abuse.”
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