Cryptocurrency is raging in many countries, especially in Israel, where people queue in front of Bitcoin ATMs. The Prime Minister of the country thinks precisely that bitcoin and its blockchain are threatening the future of banks.
Benjamin Netanyahu: the end of banks?
Bitcoin and cryptocurrency are making a meteoric rise at the moment, and this is evidenced by the price of bitcoin which simply doubled in just a few days during this month of December.
Aware of this, Israeli Prime Minister Benjamin Netanyahu has expressed his opinion on the subject in a video where he discusses the future of banks face the rise of cryptocurrencies. Mr. Netanyahu says in Hebrew:
"Is the fate of the banks to disappear? Yes. The answer is yes. Does it have to happen tomorrow? And do we need to do it via Bitcoin? This is a question mark. Benjamin Netanyahu
The Israeli Prime Minister seems to be referring to the fact that the blockchain technology on which cryptocurrencies are based is beginning to take over the traditional banking system. Indeed, the banks play the role of intermediary while the blockchain is decentralized, allowing direct transactions between the parties.
The reactions to these statements
Some business people have reacted to these statements, and most seem to agree with the Israeli politician. The founder of the Vanywhere platform has for example said that banks may be able to disappear one day because of the cryptocurrency. For him, people no longer want to go through intermediaries to reduce transaction costs.
Zen Control CEO Adam Perlow also showed his support for Netanyahu's statements. He stated :
"As the Israeli Prime Minister said, banks act as escrow agents that reduce counterparty risk. The Blockchain offers an alternative to counterparty risk by providing a new type of escrow mechanism more effective with smart contracts. As in any industry, in the long run it is hard to imagine a plausible result where the most effective solution would not make the previous solution obsolete. Adam Perlow
We are therefore awaiting the reactions of banks and financial institutions to these various statements concerning the threat of obsolescence engendered by digital currencies.