Blockchain technology, the technology behind bitcoin and other cryptocurrencies, will likely replace the current centralized financial system, according to the latest report from BBVA Compass economists.
The bank’s economists say that, while interest in bitcoin has evened out, blockchain tech is drawing more attention because of its ability to safely conduct transactions with no middleman and its potential for applications beyond purely digital currency transactions. The report highlights how the technologies “potential to be the ultimate disruptor” is attracting enormous amounts of capital investment.
BBVA Compass Chief Economist Nathaniel Karp stated:
A technology that has the ability to conduct and verify transactions via an immutable, time-stamped record that is replicated on servers across the globe has immense implications for the banking sector. We’re talking about a massive overhaul of the banking industry’s processes and a significant reduction in costs.
Led by Karp, the bank’s research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. They also follow a variety of issues that affect the Sunbelt states where BBVA Compass operates.
Karp noted :
The key question is not how, but when the disruption will become far-reaching. Blockchain technology could reshape the financial industry well beyond the payments system; it has the potential to change the face of modern finance.
BBVA Compass is US Sunbelt-based financial institution that operates 672 retail branches, throughout Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., itself a wholly owned subsidiary of Spanish banking giant BBVA.
The list of major financial institutions that are experimenting with or researching blockchain technology is growing and includes BNP Paribas, Societe Generale, Citi, UBS, Barclays, Goldman Sachs, Banco Santander and Standard Chartered.