Deutsche Bank: cryptocurrencies are "highly speculative"

Deutsche Bank team believes that by 2027, about 10% of world GDP will be somehow connected with blockchain
11 December 2017   608

Chief investment specialist Christian Nolting and Deutsche Bank IT Director Markus Muller published a presentation in which they presented their views on the prospects of blocking technologies.

According to experts, the potential impact of innovative technology on the financial market is comparable in scale with the advent of the Internet.

We expect that the blockchain will change the business model of companies in a sustained way. The blockchain technology enables a faster and cheaper exchange of assets and financial products between individuals without an [intermediary], which reduces the asymmetry of information between the individuals.

Deutsche Bank Presentation 

In addition, bankers are confident that by 2027, about 10% of world GDP will be somehow connected with blockchain.

Nevertheless, financiers responded coolly about the crypto-currencies themselves, calling them "highly speculative", given the lack of the original value or support from the central bank.

The presentation notes that although crypto currencies can become an alternative to fiat, especially in countries with high inflation, digital money must first be assigned the status of a legal asset and create an appropriate regulatory framework.

Also, bankers expressed concerns about the hardforks used to create new crypto-currencies. In their opinion, frequent "splits" of blockchain can lead to inflation.

In addition, central banks could develop their own cryptocurrencies and replace the private ones in the market.

Deutsche Bank Presentation 

I worth reminding that only this year it became known about at least five new "bitcoins": forks Bitcoin Cash, Bitcoin Gold and Bitcoin Diamond have already taken place, two more - Lightning Bitcoin and Bitcoin God - are planned for the second half of December.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   128

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.