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Blockchain’s Nic Cary: Banks Should Embrace Digital Currency Innovation

new york ideas
Blockchain CEO Nic Cary spoke at New York Ideas, a conference featuring thought leaders in the business, finance and technology industries held by The Atlantic and the Aspen Institute, on 6th May as part of a panel discussion entitled “Cash, Credit or Digital: What Happened to My Money?”The panel featured Cary, Pryor Cashman partner Jeffrey Alberts and McKinsey & Company principal Philip Bruno, and was moderated by NPR “Planet Money” host David Kestenbaum.The half-hour talk covered a host of current debates in the bitcoin industry, including whether digital currencies are best suited as a payment mechanism, how governments should regulate the industry and the potential for governments to shut down bitcoin and similar payment methods should they so choose.The most notable comments came from Cary when he was asked if, given the anti-bank sentiment common to bitcoin enthusiasts, he would welcome the entrance of more traditional financial players like Bank of America into the space.Cary responded that he would “love if Bank of America got involved in bitcoin”, suggesting that he would like the company to embrace the wider adoption of technology taking place across all industries, stating:“When I think about the digitization of things – we used to send mail, now we send email, we used to buy books, now we got them on Amazon.com – not to expect the digitization of money would be naive.”Alberts has previously represented clients in digital currency disputes and most recently spoke at Inside Bitcoins NYC, while Bruno is known for his expertise in global payments.Bitcoin as a payment systemThe conversation kicked off with Kestenbaum sharing his experience trying to buy lunch using bitcoin, one that occurred before the technology’s more recent uptick in adoption. The comment sparked debate about bitcoin’s potential use as an everyday payment tool.Though Cary related his own experiences living entirely by using bitcoin as a currency, Bruno countered that he believes the speculative nature of bitcoin will perhaps be an obstacle that prohibits mainstream users from achieving a similar experience.He cited his belief that most bitcoin transactions are speculative, saying:“To get from here to something that is less speculative and something that is more commerce, is going to be a messy process.”Alberts offered a different take, suggesting that bitcoin’s speculative, deflationary nature, though perhaps prohibiting it from becoming a foundational currency, would not be terribly relevant given that bitcoin could evolve to offer a lower-cost back-end to payment providers.Regulator interest in bitcoinBruno was the most outspoken on the topic of digital currency regulation, suggesting that these institutions are genuinely intrigued by the prospect of a lower-cost payment system.Bruno said:“Regulators and central banks are really looking at [...] how to design payment networks and what they can learn from the technology.”One key benefit that these organisations see potential in, he suggested, was the social impact of a technology that could enable more underbanked consumers to gain access to financial services. Bruno also noted that major financial institutions are “very serious about studying bitcoin”, though they have not made any commitments to the technology.Alberts chose to view the increasing interest in bitcoin among regulators as a sign of the industry’s development, while Cary suggested the initial responses from governments – as in the case of the most recent IRS decision on the matter – are a sign more education is needed.Bitcoin as the new InternetOver the course of the conversation, Cary did his best to frame anti-digital currency sentiment as misguided, given the larger transitions happening around the world. He said that those who do so are “putting [their] head in the sand of the financial future”.Cary compared bitcoin to email, suggesting that while consumers may not understand it, they will eventually be able to successfully use it to obtain benefits at a lower cost.Further, he indicated that given this long-term appeal, digital currencies are still an attractive investment, saying:“Imagine if you had the opportunity to invest in [a system like email]. That’s what’s at stake today.”Image via The AtlanticBlockchainNic CaryregulationUSA
Original author: Pete Rizzo