News

Bitcoin, blockchain not a current threat to banks

Bitcoin and the blockchain might be a threat in the future, but only if their current issues and limitations are solved, Westpac CEO says.

September 8, 2015

Westpac Banking Corp. CEO Brian Hartzer believes that banks do not have to worry about bitcoin and the blockchain for now, but says that these technologies could be disruptive in the long run, according to a reportby the Australian Financial Review.

In a recent bank strategy briefing, Hartzer said that he sees the blockchain as being "quite powerful from an efficiency point of view," but doesn't think it poses an immediate threat to banks.

"The development of the blockchain [will] certainly [have] a very interesting and potentially disruptive impact on financial services," Hartzer said in the briefing. "Nobody really knows yet where it is going to go [and] there are a number of limitations and challenges with it."

For example, Hartzer argued that bitcoin's volatile price, the limited size of the blockchain — which limits numbers of transactions — and criminal influence are downsides to bitcoin and the blockchain. However, Westpac still believes the virtual currency can be useful.

"We are looking at it, we are experimenting with it. I think it is a bit too soon to panic about it," Hartzer said. "It is potentially quite powerful from an efficiency point of view. It is one of the things we are keeping an eye on."