Wall Street banks will eventually accept the technology behind bitcoin, even if it takes five or 10 years.
That is according to Blythe Master, the chief executive of Digital Asset Holdings, and one of the biggest names in the business.
Bitcoin is a digital currency, the value of which fluctuates wildly. It is the technology behind it – the so-called blockchain – which gets finance executives really excited.
“The motivation for firms to open their eyes… is a combination of fear and greed,” she said Tuesday October 20 at The Economist’s Buttonwood conference in midtown Manhattan.
Masters was one of a group of JPMorgan executives who helped create the market for credit default swaps in the 1990s, and later went to head its global commodities division.
She said that banks are in “a difficult revenue environment” and are trying to cut jobs to reduce costs.
“That’s not a sustainable situation,” she told the audience.
Blockchain technology has the potential to simultaneously reduce costs and risks. It could help automate complex back-office tasks currently carried out by humans, and help cut the risk of errors.
Big banks are alive to the potential of the technology. There are now 22 banks involved in an alliance to draw up industry standards and protocols for using the blockchain in banking.