Updated: May 10, 2019
It's been a hectic couple of months in the cryptocurrency world!
Here are just a few of the highlights:
Bitcoin price increased about 68.5%, trading at ~$6100 at the time of publication of this article, and is on its third month of positive momentum.
Facebook was reported to be working on its own cryptocurrency which would allow users to remit payments/settlement via facebook's network, without bank/FI rails or settlement.
In short, in the past three months, the non-traditional players made impressive strides towards the increasingly likely extinction level event looming over the aging and lethargic species traditionalis bankensis.
Looking for a reason to put cryptocurrency on your strategic planning roadmap or (at a minimum!) incorporate it into your planning session dialogues this year? Take your pick; because any ONE of these articles ought to stir an inescapable anxiety and urgency within your financial institution, and each illustrates why you should at least be THINKING about how you'll remain relevant in the arriving world of digital/cyber currency. Combine all the above stories together in a mere THREE MONTH timespan (along with the other significant stories not mentioned above!) and it's abundantly clear the swell is coming!!
Are you ready to ride the impending wave?
We could deliver an entire seminar on each of the articles above, exploring how and why they're pertinent to you financial institution's future plans ... and we'd love to do that for you!
However, we'd suggest our financial institution clients should focus on the latest announcement regarding the FORTY MILLION DOLLAR ($40m!) security breach at Binance.
As global adoption of cryptocurrency for transactions and value storage increases, so too will the number of consumers using it.
As consumers diversify their holdings into cryptocurrency, banks/CUs (especially local/community institutions) will experience the problem of deposit dollar drain.
As financial institutions lose centralized deposit dollars, consumers will eventually learn that the wild west of decentralized ledger systems and non-traditional exchanges (which are not regulated financial institutions) are less trustworthy and secure than their current bank/CU.
This latest news related to Binance illustrates a simple point: consumers will need TRUSTED/TRUSTWORTHY institutions to safeguard their new and diverse digital assets.
The most recent data breach (which is the same as vault robbery, btw!) at Binance will become an increasingly troublesome trend. That said, we don't suspect this will dissuade the documented deluge of consumers from continuing to shift deposits into the cryptocurrency ledgers/systems. After all, is your financial institution offering a 68.5% rate of return on any of your deposit accounts over the last 3 months!? Could you if you wanted to ... exactly, which is why it's essential to develop and deliver a product/service which leverages your position as a centralized and trusted partner without over exposing your deposits and members to the potential drain into the digital currency and distributed ledger ecosystem.
If you're on a modern, relevant, core banking system, cryptocurrency can be part of your core business strategy. Your customers/members are going to be looking for PROVEN institutions to store their increasingly valuable and in-demand digital assets (cryptocurrencies).
For many financial institutions, 2019/2020 will be decisive years in which they correctly choose to invest into technologies which enhance their core technology and their core business model (as a trusted/centralized financial institution), thereby keeping them plugged into the future of money; or, they'll throw away valuable dollars (at a pivotal and priceless moment) into the buzzword black hole of "blockchain" (disregarding the fact cryptocurrencies remain the original, most obvious, and inherently valuable use case for distributed ledgering - i.e. blockchain - technology).
Don't divest your institution of its most valuable asset in this evolving era of cryptocurrency - your position as a trusted/centralized (probably local) financial institution.
Are you ready to ride the wave; are you adrift in this ocean of opportunity; are you sitting and waiting for the tides of change to come crashing down?
Let's chat ...