SWIFT - Will banks use Blockchain, the technology behind Bitcoin?

Yes they will.

At least they have decided to put a lot of energy and investment into finding out if they can use it. Nordea and SEB in the Nordic are members of the DLG (Distributed Ledger Group) together with some 40 other banks, including Goldman Sachs, Citibank, BBVA and Santander. There are other groups of banks as well.

Blockchain may completely revolutionize the whole banking industry.

It might enable you to pay your invoices at close to zero cost and in seconds. Even payment cross borders of countries will be low cost and almost instant. The technology also enables contract to be shared and securely signed between banks and customers, so called “smart contracts”. “Smart contracts” might also include a Java Script type of macro, for example “First change ownership of the asset, then do the payment”.

I will come back with a better description on the Blockchain technology within a few weeks. 

For now I will just inform you that I will be on a Blockchain panel at SWIFT Nordic conference in Oslo early March.  

Have a look, agenda day 2:

https://www.swift.com/insights/events/swift-nordics-regional-conference-2016

When will crypto currency replace kroner, USD and Euro?

This might be a question to ask. You might think – this will never happen. I am not so sure, but it might take 30-40 years. First in parallel with SEK, NOK, DKK, Euro, USD and other currencies, then as a replacement.

Version 1 - Gaming.
It kicked-off with all these online games early 1990. In wargames you can buy weapon for money, using your credit card. In less violent games you buy house, farms, dolls, masks etc. for money online. But you first translate your Euro and dollar into a crypto currency, and then buy what you need. For example Japanese DeNA has a Moba Coin, NHN has a Line Coin Kakao Talk has a coin called Choco and Tencent have a coin called QQ. Moba Coin had a volume of 689 million USD in 2012. QQ (China) had a volume of approximately 900 million USD in 2005. QQ was also used for payment of other products and services in the real world, as the Chinese banking infrastructure was less developed.

Version 2 - Bitcoin
From Wikipedia “Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009.The system is peer-to-peer; users can transact directly without needing an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses bitcoin as its unit of account.”
If you look at the Bitcoin monitor you will find that daily number of Bitcoin transaction first week of December was around 200 000. The value was around 5 million USD, and more than 350 000 accounts are registered.

The main reason for cryptocurrency is that the “leakage” in present banking system are too large. Cost of transaction is far too high. Sending money from Europe to Asia might cost up to 8 % of the transferred. That is not sustainable in the long run and in our more and more digital world.

Version 3 – WorldCoin

As far as I know Worldcoin do not exist, but something like it might in the future. To open a digital wallet you need to go through all the KYC processes that comply with the regulator. Regulators might grant a “master” role in the network, overlooking all payments and contracts. In addition to payment worldcoin also accepts “Smart Contracts”, and all banks using the same protocol.

I will come back to this later on. This first blog post is for testing the blogging. I will try to have a new blog post every two week.