Could blockchain be rendering banks and brokers obsolete?

TL: DR Breakdown

  • ABN Amro releases a report suggesting that blockchain technology might make bank services obsolete.
  • The protocol economy may be the future of financial services globally.

The Netherlands-based bank ABN Amro recently released a report that suggested blockchain technology would render banks and related services needless. Its predictions state that more customers prefer online services as they give them more control over what they can do. It suggests that the protocol economy will be taking over the future in finance.

The head of investment strategy in ABN Amro, Ralph Wessels, mentioned that current go-betweens in banking services have value. Nevertheless, the progression in technological advancements will rob the system of certain positions. At the same time, brokers can still bring trading parties together but will lose their worth once these processes become automated.

However, Bart Versteeg stands against this notion, stating that blockchain will not disrupt the necessity of his work to the economy. The Civil Legal Notary and the Royal Notarial Association director pointed out that the immutable records on blockchains have no way of proving their accuracy. Despite the instantaneous, cost-effective transactions that blockchain facilitates without intermediaries, notaries can confirm the legitimacy of transactions.

The concept of ethical economy

Bart agrees on the role blockchain is playing in transforming economies. In one of his examples, he mentioned El Salvador’s decision to go digital with Bitcoin earlier in September this year. Most economists expressed their worry about a country’s acceptance of a digital asset as a legal tender. Moreover, their thoughts were based on cryptocurrencies failing to solve anything that traditional finance cannot.

Nonetheless, El Salvador’s president mentioned its help for citizens who otherwise suffered hefty transaction fees. This factor introduces the need for an ethical economy that ensures cheap, fast, and safe global transaction pathways. Furthermore, it is to solve the current pain points within the financial industry while bridging the divide between the poor and wealthy.

Protocol economy would mean implementing consensus algorithms in traditional finance transactions. Additionally, it would be the boost economies need to support everyone socially. A more significant part of the population can help the economy and earn incentives for it in the process. The big question is whether countries can adapt to the concept and implement it successfully.

Banks worldwide exploring blockchain options

The People’s Bank of China recently began the necessary steps into integrating the digital Yuan into its economy. More banks worldwide are following suit, including Caribbean banks and the European Central Bank. In the next few years, most will have found convenient ways of implementing central bank digital currencies into their national financial systems.

Meanwhile, the global population needs to recognize blockchain technology’s efforts to improve banking systems. It is safe to say that the digital world is slowly but surely taking over all necessary services, and the world is yet to see more.

This post was last modified on October 16, 2021 2:07 pm

Edith Muthoni

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, cryptocurrencies, blockchain, and cryptocurrency investments.

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Edith Muthoni

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