Marcel Cassar, chairman of the Malta Bankers Association (MBA), has told The Malta Independent that cryptocurrencies may pose a significant threat to banks, possibly making them obsolete.
He suggested that the threat to banking of mainstream cryptocurrency adoption was because “their traditional role as main payment intermediary for funds and currency transmission will become challenged, if not obsolete”.
It is hardly surprising that such comments would originate from a banker in Malta given its current place in the crypto space. Malta has become increasingly appealing to Bitcoin companies conducting business there due to the island’s positive spin on blockchain technology and its open-minded approach to regulation linked to a strong economy. It also boasts the largest cryptocurrency trading volume in the world, according to Morgan Stanley.
Add to this Prime Minister of Malta Joseph Muscat’s recent plans to re-establish several cryptocurrency businesses in his country’s jurisdiction and it is clear that the country is preparing for a future with cryptocurrency. Malta already has pro-blockchain legislation and existing regulations around cryptocurrency, making this announcement an outreach for more cryptocurrency companies to locate in the Mediterranean country.
Cassar sees these technologies as positive for banking in the sense of blockchain offering unbridled and irrefutable authenticity to transactions and documentation, himself describing the benefits as “undisputed”, but sees any major significant changes by banks as still quite distant.
His comments that banks may well be made obsolete as the new technology really takes hold don’t extend to fiat currency. Some banks, he says, are filling a gap and profiting by just simply limiting their involvement to advice to customers regarding ICOs and custody services.
Independent.com refers to many banks’ current lack in innovation and energy in getting on board with the new tech, pointing to ex-Citigroup boss Walter B Wriston who in 1981 commented:
“The belief that a market is yours by some divine right is an old dream. Companies that fail to change become tombstones in the corporate graveyard.”
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