In June of 2015, one of BNP Paribas’ analysts, Johann Palychata, penned a pro-Bitcoin article in the company’s Quintessence publication. But over the last several months, banks (including BNP Paribas) have distanced themselves from the words bitcoin and even blockchain, preferring to go with distributed ledger technology instead. They’ve since decided to go with a narrative that highlights them adopting the new technology, without the internet drug money (though they’re still OK with cartel, real drug money).
An Innovative ‘Invention’
As more news piles up about banks around the world starting experiments and focus groups dedicated to blockchain technology, it’s worth it to look back in hindsight and pinpoint the inflection point of public opinion against bitcoin’s technology.
There was a time, though, when even France’s largest bank would admit that Bitcoin and blockchain technology created a possibility of a world without banks.
In his article, Palychata explains the functionality and process of the Bitcoin network briefly for his mostly banker audience, then delves into the potential implications of blockchain technology, all while obviously referring to Bitcoin. He emphasized:
It [Bitcoin] should be considered as an invention like the steam or combustion engine.
Others have even given Bitcoin the same status as the printing press, or the Internet – and rightly so. His message that Bitcoin is likely to be disruptive is clear, and it’s a message that you just won’t hear from banks anymore.
BNP Paribas Listened
Palychata posits two possible scenarios for the success of “blockchain” technology. Either the post-trade infrastructure is disrupted in its purest form, or the distributed ledger joins IT infrastructure as another layer only. Both of these scenarios are likely; however, it is a mistake to think that they are mutually exclusive. BNP Paribas has been leading the charge and recently held a blockchain bizhackathon.
As France’s largest bank, the move has not gone unnoticed. Other European, American, and Australian financial institutions have started to express extreme interest in distributed ledger technology programs.
Recent news from China and Japan show interest in creating national cryptocurrencies – though that could mean any number of things. Polychata means to say that some existing industry players will become extinct.
His article also serves as a call to action for BNP Paribas. He espouses “the virtue of decentralization and the promises of the blockchain.” And it seems that BNP Paribas has listened. The bank has joined dozens of other leading centralized financial institutions, such as Barclays, to explore the potential benefits of this new technology within a consortium and internally. Barclays has more recently stated that:
Blockchain could be the most significant social and political innovation to impact Africa in 100 years.
Blockchain is the name of the technology that will change the world, sure we can concede that point. In Africa, things like Bitcoin and Ethereum are clear cut applications of blockchain technology that will undoubtedly be the vehicles for this significant social and political change. Don’t expect the banks to clarify, though. Learning to read between the lines is crucial in this and every industry.
While banks have completely abandoned the word “Bitcoin,” that doesn’t mean it isn’t there. As the mainstream continues to marginalize Bitcoin in favor of blockchain technology, specifically “bankchain,” just remember that whatever the future scenario may be, permissioned distributed ledger systems will exist side by side with true (public) distributed ledger systems.
Users big and small will always trend from the more centralized version to the more decentralized version for the same reason that Internet use and crazy social ideas like democracy and anarchy always spread – because the Human craves true Freedom. When you start hearing Fox news talk about distributed ledger technology, just know that they’re promoting Bitcoin indirectly.
What do you think about financial institutions shunning the elephant in the room? Let us know your thoughts in the comments below.
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