#1 Ripple “as you go”
Mobile transactions are steadily becoming a quicker and more popular banking option. Both banking and crypto have taken note. The Santander Group was the first to announce that it “will introduce a mobile app that uses technology from the cryptocurrency startup Ripple to power fast cross-border payments.” Such a well-known banking group adopting this type of technology will likely have an impact on a broad range of financial institutions. The knock-on effect is already apparent: Ripple is also working with 61 Japanese banks to introduce a transactional mobile app, indicating a significant shift in how bank payments may be completed in the future.
#2 Blockchain pilot schemes
Another example of a European-based bank getting on board the crypto-train is HSBC. This international bank is “on the verge of doing live trade finance blockchain transactions with clients.” HSBC, it must be said, have been trialing blockchain-based ideas for a while now, since 2016 in fact. HSBC is treading carefully with the possibility of incorporating this disruptive technology into their system, but they have been actively discussing pain points with their trading partners as they iron out the kinks in the potential trade-cycle. It will take time to get the system running smoothly enough for commercial use and the project is in the pilot phase at the moment. One things is clear: clear that HSBC is committed to ramping up its digital agenda for the foreseeable future.
#3 No longer just an empty threat
Up until the latter half of 2017, cryptocurrency was more spoken about in certain circles and the wider public may have seen it as a passing fad. But of late, the many flourishing blockchain developments bring to light the fact that there is a whole new economy forming in the shadows. Bank of America has recently admitted the threat that decentralization poses to its business model. Up till now, it could be argued, crypto hasn’t always proved itself as particularly easy or quick to transact with. It was therefore not something accessible to the casual user. But that is changing and increased [crypto] competition may “negatively affect earnings” for Bank of America. Rumor has it that other big banks have also admitted to feeling the effects of a change in how the financial industry game is played.
#4 Some banning crypto purchases
Some of the biggest banks in the US and the UK have been blanket banning credit card purchases of cryptocurrency. US banks Bank of America, Citigroup and JP Morgan are getting on the anti-crypto bandwagon, as are UK banks Lloyds, MBNA and Halifax, to name but a few. Rather than paying attention to the ban itself, we at Element Group are watching the reasoning behind it. Consider point #3 again — if cryptocurrency were not a potential risk-factor for these financial entities, they’d hardly be bothering their time to create a push-back. But banks are noting a change in the way the world is financing and must at least be feeling a slight pinch in their rather deep pockets to be making such radical restrictions.
#5 Others getting on board
Meanwhile, in other countries, banks and governments are seeing cryptocurrency and blockchain technology as something to be embraced rather than something to be feared. Last month the Israeli Supreme Court, made a landmark decision to prohibit banks from restricting cryptocurrency activity. And Israel, like several other countries, is coming up with its own set of cryptocurrency regulations to monitor this new financial system somewhat. Liechtenstein also made the news recently as family-run Bank Frick announced they would be one of the first banks in the world to allow their clients to directly invest in cryptocurrency through their traditional accounts. We predict that other smaller banks will soon be following suit.