06 / 04 / 19
If you can’t beat them, join them, right? After bashing cryptocurrency for years, major financial institutions are finally joining the crypto world.
Major banks like JPMorgan, HSBC, UBS and others were highly skeptical of blockchain and cryptocurrencies in the early days, but they have recently changed their tune. Now they are licensing blockchain technology, patenting their own bespoke blockchain technologies and fully adapting the multitude of benefits that blockchain and cryptocurrencies have to offer.
After famously bashing Bitcoin as a “fraud” that global governments would “crush,” JPMorgan Chase CEO Jamie Dimon is pushing his company headfirst into the crypto space by becoming the first major American bank to launch its own coin. In May of 2018, JPMorgan filed a patent for a peer-to-peer network using blockchain technology after an announcement of their endorsement a year prior, in 2017.
A big reason that banks are getting in on the crypto action is the reduced settlement time of funds in conjunction with the same (if not higher) degree of security of transactions. Instead of having to be processed through clearinghouses, collateralized assets can be directly forwarded to the recipient. Skipping the clearinghouse step shaves days off of transactions, and maintains the security of blockchain’s unique transaction identifiers.
Big banks are not the only players interested in the incredible technology that blockchain offers. Russia’s central bank is considering using a gold-back crypto to handle their transactions. This comes as, just in the case of large American banks, a total shift from previous sentiments; In 2015 the country blocked media which prominently discussed the technology. Russia’s first deputy governor of the central bank stated once that their central bank would go so far as to block cryptocurrencies because of the high risk to investors.
It seems as though once the banks figured out that they could license the technology for themselves, the stance shifted. Japan has also recently adopted the technology ahead of the G20 summit as long as it is licensed.
Here at Aliant, we realized early on that blockchain and cryptocurrency were going to majorly disrupt the payments industry. Instead of rejecting it like most other processors and traditional financial institutions, we kept an open mind, spent months learning about how it worked, and embraced that it can change payments as we know it. The Aliant team has spent the last two years developing our own technology that allows our merchants to accept cryptocurrency payments, and we are proud to be the ONLY payment processor offering a credit card, debit card, and crypto solution. It will be interesting to see how the traditional institutions continue to get in on the action.
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