Zeeshan Feroz, CEO of Coinbase UK delved into this topic and more at the London Summit 2018 earlier Wednesday. This and more was on full display during his panel discussion, Cryptocurrency: Creating an Open Financial System for the World.
According to Feroz: “I feel this is a good thing and the sign of a future that is imminent. When you look at financial system, much of the risk stems from the fractional reserve model that we have.”
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The death of retail banks? Rethinking the traditional models
Are retail banks’ days numbered? The death of these institutions may be overblown. In fact, “I don’t think retail banks will disappear, though rather they may be forced to innovate and look for liquidity elsewhere. They have been the traditional gatekeepers for the financial system, though this may be changing,” noted Feroz.
Banks will thus be forced to take new approaches, perhaps utilizing higher interest rates or other carrots, or even a proof of safe token. “I don’t think these are disappearing any time soon and the consumers will be the ultimate winners as their products will improve. The financial system will approve namely as a result of competition as all parties will improve,” he explained.
Talking financial inclusion
Crypto businesses are passionate about core values, with an emphasis on financial inclusion. “I believe an additional currency will drive financial inclusion – a crypto asset is inherently easy to set up. There are numerous countries where less than 15% of the population has access to bank account,” reiterated Feroz.
Moving the financial system away from traditional bank to crypto asset can quickly expand this slice, creating global benefits. This is especially true for countries suffering from hyperinflation.
Is the financial system broken? Perhaps but neither retail nor central banks are going the way anytime soon. However, what their role is presently is certainly changing, and those that don’t keep up with innovation and customer expectations will disappear in this new world that crypto is creating.
“A centralized currency will definitely force or foster mass adoption. These players certainly have the potential for driving adoption in ways that no singular player can, definitely over time in this space. This is particularly true in the case of infrastructure such as wallets,” added Feroz.
If this technology or space anticipates a central bank-backed currency, then the gains would be quite rapid. As such this could yield several benefits.
According to Feroz, “We are trying to bridge a gap between the fiat and crypt world. From a Stablecoin point of view there is a high range of flexibility and is incredible, but it does not do much to change the message in the right direction. Though Stablecoins in and of themselves is not a threat to anything.”