Editor Notes: ” Deutsche Bank has released a two-minute video explaining the stance of its top brass on Bitcoin and Blockchain technology – and how it should be treated.
Deutsche Bank Says Blockchain ‘Genius’
The infomercial-style clip below features Global Head of eCommerce Distribution Rhomaios Ram and Chief Digital Office Edward Budd discussing the bank’s opinion on Bitcoin and blockchain in the past and in 2016.
Ram began by stating that the technology was “genius,” but that that would ultimately not prove a powerful enough factor in creating seismic shifts in legacy banking.
“It was very unlikely that Bitcoin – in our view – would succeed as anything beyond the usage of a few enthusiasts,” he said, adding:
[…] It was hard for us to imagine central banks, regulatory bodies and actually society itself giving up control of its economic methodology for transferring value.
This so-called “economic methodology for transferring value” will to many sound like yet another incarnation of the popular opinion given out by extant financial institutions in order to sideline the impact of Bitcoin.
Deutsche Bank, as a major player among these institutions, has developed a habit of “pseudo-engagement” with digital innovation in its sector while playing down the potential it harnesses for change outside the banking sector’s direct control.
In March, Deutsche Bank hosted the Transaction Bankers’ Forum 2016 in Frankfurt, during which the European Central Bank made various remarks about so-called “DLT” (“Distributed Ledger Technology”) and how it is “one of several possibilities” for “keeping pace with market developments and technological progress.”
At the same time, the bank is fighting rumors of insolvency, while recently its entire ATM network went down due to a “technical glitch.”
Proving ‘Real World Stuff’
In this week’s publicity, Budd continued on a similar trajectory: that blockchain technology could – after much investigation – potentially be applied to financial processes. Only those, however, which are already fully under the control of incumbent financial structures.
“The impact [of blockchain technology] for banks today is different by markets and the type of and the types of assets we are talking about,” he said, drawing specific attention to smart contracts. Budd:
This will help us look at how much cost or how many financial instruments we can actually apply this technology to.
Ram however felt the need to bring everyone back down to Earth.
“What we now need to prove is really some of the stuff that is a little more real world,” he said. “In the sense of: How do you interact with regulators? What does this mean for the legal system? Is a contract that basically runs on a Blockchain legally enforceable? Etc, etc.”
Meanwhile, a recent German survey by Cofinpro showed that respondents unanimously agreed on the “enormous potential” of blockchain technology.
Executive consultant Dirk Ungemach-Strähle said the findings showed it is “electrifying the [German] finance sector,” could “unleash enormous upheaval” and that the experts even considered it a “revolution” for the industry.