Bitcoin is both currency and technology so it is necessary to analyze the impact on banks following a double path.
From the point of view of currency we need to start from the main functions of money:
medium of exchange: bitcoin, also integrated with smart contracts, will be a fast, low-cost, and worldwide accessible medium of exchange, and could contribute in changing a lot payment system, from payment between banks to mobile payment via wallet or QR code; analysis of the impact on available payment system, remittance market and P2P transfer is one of the main and compelling task for banks;
store of value bitcoin is supposed to be deflactionary but in any case the developing of use could support and increase of value or at least a progressive and stable quotation; banks have a lot to do in storage of bitcoins and smart contracts, overseeng points of exchange, developing sustenible and dedicated AML policy and spreading best practices; banks have the opportunities to become the safeguards for customers and the first professional supporters of bitcoin, if they are able to play bitcoin on business and far from ideology;
- unit of account bitcoins are divisible, fungibile and well-known all over the world, but actually unpredictable, so banks have to study and launch new products that allow lending, commercial agreements that involve debt, secondary markets and some kind of derivative products able to separate the function of exchange from asset’s investment strategy;
But bitcoin is also a technology at the beginning of development as everyone could understand with the examples of colored coins, ripple and ethereum. Also a strong relationship with the community of miners could be very important with the aim of support high-quality standard of security in an area of disruptive innovation.
For sure venture capitalists and investment banking have to take care of this opportunities and innovative banking service could support this kind of innovation, but there is also the possibility of a huge impact on all banking industry and not only in the area of new technology.
Bitcoin involves a new sense of trust and the main mission of innovative banks in the post-internet era is understanding the new sense of trust and what is it good for.