The panelists were not subtle in assessing the future of digital currencies and the decentralized blockchain technology behind them.
“Cryptocurrencies and blockchain will take over the world, it will be a bigger impact on the world than the Internet,” said investment banker Dennis O’Neill, chief executive of Chicago-based O’Neill Capital Advisors.
O’Neill, who helps entrepreneurs with initial coin offerings and other digital-currency initiatives, participated in a panel dubbed “Tales From the Crypt(ocurrency): Should Banks Fear or Embrace?” at last week’s Mobile Payments Conference in Chicago. He and his fellow panelists concluded that American banks, the payment card networks, and government regulators mostly fear blockchain and cryptocurrencies because of their potential profit-sucking disruption of legacy financial businesses.
Large banks and the Securities and Exchange Commission, “which are basically the same people, have both feet on the brakes, trying to slow the growth of this market in every way, shape, or form,” O’Neill said. “The reason being is that they are trying to protect the interests of the large banks, the credit card companies, the investment banks.”
While the U.S. financial industry seems to resist cryptocurrency/blockchain trends, other countries are embracing them, with foreign startups attracting talent and getting a big head start, according to panelist Scott Diamond, financial executive at Chicago Digital Asset Network, a consulting and education firm. “For every American teenager that already is interacting in this, there [are] 50 more Korean and 100 Japanese kids,” he said. “That is an eye-opener … we are easily five years behind the rest of the planet because we’re so dang conservative when it comes to transmission of value.”
The third panelist, Tom Berg, co-founder and managing director of Chicago-based consulting firm The Digital Ledger Group, said he could send $300 to Australia for less than a penny thanks to blockchain technology. He said five large Japanese banks now sell cryptocurrency.
The problems of the new cryptocurrency world, including wild price fluctuations for Bitcoin and other digital currencies, worthless ICOs, and the fact that drug dealers, ransomware extortionists, and other disreputable characters seeking anonymity often want payment through Bitcoin, are well documented. But the panelists said there are misconceptions.
“Cryptocurrency did not invent or create money laundering, it didn’t create the ability to buy illegal drugs,” said Berg. “They existed before Bitcoin.” He added that “the criminal aspect of all of this is that they actually think Bitcoin is anonymous,” claiming that investigators have tracked terrorists using Bitcoin.