Will blockchain make banks disappear within 10 years? Bitcoin tycoon: It’s too early to say

Fintech is gaining momentum, and blockchain technology has become a popular topic. Although many industry leaders have warned that the survival of banks may be threatened, and Andrey Sharov, vice president of Russia's Sberbank, warned last week that banks may disappear completely by 2026 due to blockchain, Brock Pierce, chairman of the Bitcoin Foundation, a non-profit Bitcoin organization, believes that it is too early to discuss these issues.

CNBC reported that Pierce pointed out in an exclusive interview on the 11th that although the adoption of blockchain technology is bound to impact some of the bank's operations, it will ultimately create more opportunities, and most of the businesses that are most negatively affected can no longer create value for the bank and may even drag down performance.

However, many financial giants have seen the potential business opportunities of blockchain. Blythe Masters, a former JP Morgan banker and a leader in the derivatives industry, declined a job as head of Barclays Investment Bank and joined Digital Asset Holdings, a New York startup specializing in how to use Bitcoin-related technologies to reduce banks' back-office costs. Masters also said at the "Money 2020" conference held in Copenhagen last week that blockchain technology could be commercialized within a few years.

Pierce believes that it may take longer for blockchain to become popular because it will take time for banks to integrate this technology and it will probably take several years of testing before it can be popularized. In the short term, other industries with less stringent regulations are more likely to be affected by blockchain.

Blockchain is an important technology behind Bitcoin. It works like a decentralized ledger that records every transaction and stores the information on a global network to prevent falsification of the ledger. Banks can apply blockchain to remittances, securities trading and other businesses, which can greatly improve efficiency.

Business Insider previously reported that, in simple terms, blockchain is mainly about splitting a database among multiple computers, making it impossible for a single entity to control the database, while protecting data, tracking payments and payees, and monitoring transaction balances in an encrypted manner. This entire system is called "distributed ledger technology." As long as a bank or exchange confirms that a company does have funds or assets that can be traded with another company, the entire settlement time can be shortened to a few seconds.

This method of trading and tracking valuable items is not only effective and convenient, but also has many benefits. For example, it can speed up the payment process and allow manufacturers to share production logs with suppliers. The reason why it is so convenient is that many people share and communicate with each other on the same database and platform.

R3, a startup led by David Rutter, former head of electronic brokerage at ICAP Plc, the largest interbank broker of U.S. Treasuries, has signed on more than 20 banks, including Bank of America Corp., Citigroup Inc., Deutsche Bank AG, Morgan Stanley, Societe Generale SA, Barclays Plc, Goldman Sachs Group Inc. and JP Morgan. R3 is mainly studying how to integrate securities, derivative financial products and loan transactions with distributed ledgers and blockchain technology.