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The changing world of money and why it’s a big deal

After a not so short “sabbatical”, I am back at Finextra. (Thank you for the warm welcome, Steve.) To kick things off, I’ll write a series of short blog posts on the changing world of money – blockchain, stablecoin, cryptocurrencies, micropayments, ICO, STO, to name a few global macrotrends and buzzwords.

Things are changing at breakneck speed. 256 bits of digital data is (was) worth more than 256g of pure gold (think about that!). Fiat money gets tokenised. Transaction parties can deal with each other without any status quo intermediaries, instantly, across the globe. Hypothetical companies raise billions of real dollars for non-existent solutions that will never be built. And that’s just the beginning…

Why should you care? A number of transformative initiatives in the market are now being driven by bold CEOs of large financial companies – they are usually risk-averse people, but not anymore. If your boss is discussing blockchain with her husband (and I am not talking about Kelly and Jeff here), you should have an opinion on it too.

Also, the incumbents are now disrupting the disruptors, entering the space previously dominated by agile fintech companies: Goldman with Marcus, JP Morgan with You Invest and ICE with Bakkt, to name a few. You have to wear multiple hats now, whilst spinning several plates.

What should be on your radar? Bakkt and stablecoin to start with. 

Bakkt’s grand vision goes well beyond institutionalisation of Bitcoin trading – the company is planning to redefine how the global payments industry works by disintermediating banks, acquirers and card networks. That’s not just big and bold – it’s a US$2.2 trillion pie. 

Stablecoin (digital fiat) – when done right – decouples money from the legacy monetary system, removing friction and inefficiencies. To requote Ginni Rometty, the CEO of IBM, that’s the equivalent of what the internet did for information. Instead of going to a library, buying a newspaper or switching on TV, you simply use Google. 

 

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 September, 2018, 18:20Be the first to give this comment the thumbs up 0 likes

Welcome back @AlexanderPeschkoff!

After reading this article in FORTUNE, it looks like ICE / Bakkt plans to strip Bitcoin of almost all of its unique features in order to bring it into the mainstream market. Thing is, I'm quite sure this strategy will work. Decentralized architecture always sounds romantic but centralized architecture always seems to win in the end. We saw it with ERP before. I'm sure we'll see it again with BTC now.

Alexander Peschkoff
Alexander Peschkoff - Trusted - London 05 September, 2018, 21:47Be the first to give this comment the thumbs up 0 likes Thank you, Ketheraman! I missed Finextra crowd. Bakkt is a really interesting animal. As for BTC, they seem to be agnostic - they could have been trading seashells. BTC attracts paying audience, that’s all it is about. However, I am intrigued by their grand vision. It truly is HUGE. As for decentralised - just blogged about it. It’s a fallacy. Distributed, though, does make sense (it can still be centralised)...