World’s leading bankers display shocking ignorance
Wednesday, 18 October 2017
By Bernd Struben
- A week in the wolves’ den
- Even more certain of the future
Today we bring you our third guest essay from crypto expert, Sam Volkering.
If you’ve been following along with Port Phillip Insider this week, you’ll know he’s writing to you from Toronto.
Sam made the trip over from London to attend the SIBOS banking and finance conference. And some of what he’s heard so far is nothing short of shocking…
You’d expect executives of the world’s biggest commercial and central banks would be atop the crypto revolution. After all, the blockchain technology behind cryptos is set to turn the banking world on its head.
Yet, as Sam tells you below, most appear to be sleepwalking into the future.
Not that their ignorance diminishes the opportunities offered by cryptos and initial coin offerings (ICOs). Quite the contrary.
Now, before handing over to Sam, a reminder.
If you signed up for Sam’s Crypto Masterclass, check your email for some important news from Sam Volkering and Kris Sayce.
Spaces in Sam’s new premium advisory service, Crypto Tech Investor, are strictly limited. Once it’s full…that’s it. We won’t be able to accommodate any new members.
With that said, read on for Sam’s article following the market review.
Overnight, the Dow Jones Industrial Average closed up 40.48 points, or 0.18%.
The S&P 500 gained 1.72 points, or 0.07%.
In Europe, the Euro Stoxx 50 index finished up 1.50 points, or 0.04%. Meanwhile, the FTSE 100 dropped 0.14%, and Germany’s DAX index dropped 8.64 points, or 0.07%.
In Asian markets, Japan’s Nikkei 225 index is up 6.34 points, or 0.03%. And China’s CSI 300 is up 0.48%.
In Australia, the S&P/ASX 200 is up 7.60 points, or 0.13%.
On the commodities markets, West Texas Intermediate crude oil is US$52.03 per barrel. Brent crude is US$58.20 per barrel.
Gold is trading for US$1,286.55 (AU$1,639.96) per troy ounce. Silver is US$17.06 (AU$21.75) per troy ounce.
One bitcoin is worth US$ 5,575.77.
The Aussie dollar is worth 78.45 US cents.
And now, over to Sam.
A Week in the Wolves’ Den
By Sam Volkering, from the SIBOS banking conference in Toronto
The five panellists sat on stage. Two from central banks — the Bank of Japan, and the Bank of Canada. Three from commercial banks — Citi, Standard Charter, and ING.
The topic in question was blockchain, distributed ledger technology (DLT), and how it’s going to affect the payments and currency space.
Then the question came.
‘Who on the panel owns any bitcoin?’
You could see fear strike the hearts of four of them. You could see that there was only one panellist happy to answer the question.
As expected, neither of the bankers from the Bank of Japan or the Bank of Canada owned any. The banker from Citi? Nope. The banker from Standard Charter? Nope.
Only the Head of Innovation and the lead of ING’s DLT programs, Ivar Wiersma, owns any bitcoin. And he’s the only one who openly said that ING is actively participating in open source projects dealing with DLT and blockchain technology.
Now, I’m not suggesting that everyone in the world should own bitcoin right now. Not everyone knows about it. Not everyone understands it. Not everyone can see the fundamental change that’s occurring.
But it’s shocking that people in high-level executive roles in some of the world’s biggest financial institutions haven’t even tried to understand bitcoin.
They preach about how they’re all developing DLT and blockchain technology to ‘make payments better’ and to ‘improve efficiencies’. They love talking about ‘finding solutions for clients’ and ‘disintermediating themselves’.
But it’s all smoke and mirrors. Except for maybe ING. But then they’re Dutch, so maybe a little more progressive than the rest.
The point is that for all the talk and alleged understanding of the potential of this technology, they’re all in it for their own institutions. They don’t really care about someone like you or me.
The panellist from Citi said they were working on a number of DLT projects that weren’t public yet. Why? Why wouldn’t research and development be open source, for everyone to see and work on?
The answer is simple.
They want to use this as a competitive advantage. They’re in it to continue to make hefty profits at your cost. They’re happy to rework the failing system in a way that might look beneficial, but is really the same thing with new wrapping on it.
It’s repackaged chicken, past its used by date. And it’s only going to make the world sick.
Even more certain of the future
I’m amongst thousands of bankers and financial system heavy hitters. None of them know me. I wouldn’t expect them to, but I do feel like an outsider.
For one I don’t dress like them. There’s no suit, slacks or tie on me. It’s a short sleeve shirt, jeans, blazer, and glasses that aren’t black.
I also see through their ‘BS’. They talk a good game, I’ll give them that. And I have no doubt that every financial institution in the world will be rolling out DLT to their systems and processes over the coming years.
I also have no doubt that central banks will begin to issue digital currencies.
But it all misses the mark about what’s happening right underneath their noses. And what’s happening right now. And almost none of them are prepared to even properly dip their toes into the parallel financial system that’s exploding in size right in front of them.
In roughly three weeks time there will be a new cryptocurrency project launching to market. It is going to provide early investors with a chance to get a slice of something that could be as big as the World Wide Web (WWW).
This new crypto is doing a token sale — an initial coin offering, or ICO — that aims to connect every developer, every device, every data stream to create a universal blockchain. It’s creating a ‘crypto standard’ almost like how the WWW became a standard protocol to identify and consume information via the internet.
I’m already providing hundreds of eager, excited investors the inside line about it, about its potential and about how to get a slice of the ICO. But because of its potential and demand, this project is having to place people on a ‘whitelist’ to ensure that early backers all get access.
That whitelist is now open, but could fill up in a matter of days — hesitate and you might miss out.
Quite simply, this project is huge. Highly risky I might add, but potentially huge.
And the average central banker or commercial bank executive doesn’t even know about it. Heck, most of them haven’t even bothered to buy some bitcoin.
They don’t realise that within this new ecosystem are payment systems, currencies, assets that replace everything they’ve built. They don’t understand the trillions they spent creating the existing system has all been superseded by open source development by the many to benefit the many.
They don’t realise that, while they continue to spend trillions making the existing system ‘better’, the system already works better in this parallel crypto world.
Payments move cross-border with speed, ease and low cost. Settlements and clearing occurs in one transaction with proof, complete audit and trust. Assets can be moved, wealth can be generated instantly, and all without intermediaries lining up to take a clip along the way.
The ‘cryptoconomy’ is real, it exists now and it’s generating wealth at an unprecedented rate. And by the time the world’s existing financial institutions get around to working with it, not against it, they will be too late.
After spending just a few days in the wolves’ den, amongst the leading bankers of the world, I’m more convinced than ever that the future is cryptocurrencies, cryptoassets, and crypto-infrastructure.
It’s a decentralised, distributed world that is built for everyone by everyone.
It’s already minting fortunes for those who can see it and are getting on board, in a big way. People buying and using crypto with real world use, real world utility and real long term potential are already steps ahead of the mainstream.
The mainstream might know about bitcoin, and maybe ethereum by now. But they have no bleeding idea about everything else that’s in development and coming to the world every single day.
I feel privileged to be amongst the people building this new cryptoconomy. Seeing the incredible developments and projects launching and on the way. And to bring people like you the opportunities to get involved and get a slice of these new, exciting, potential-filled opportunities.
A new world is upon us. It’s early stage and incredibly exciting. And I think it’s the single biggest wealth creation event we’ll see for generations.
It could be the biggest wealth creation event of all time.
You can be a part of it. We can all be a part of it. You just have to be ready to take the first step into it.