The Blockchain Dream: A Banker’s Perspective
In a recent interview with The Malta Independent, Marcel Cassar, the newly appointed chairperson of the Malta Bankers Association, shared his thoughts on the alluring world of blockchain technology. Dubbed by Cassar as a “banker’s dream,” he acknowledges the transformative potential of blockchain, yet adds a dash of realism by comparing the current pace of digital evolution to a “rush-hour gridlock trapping a Formula 1 car.” Fast cars may be stuck, but the wheels of innovation are still in motion, albeit slowly.
Blockchain: A Game-Changer, But Not Overnight
While Cassar dares to dream of a blockchain revolution, he emphasizes that widespread implementation faces several hurdles. He recognizes blockchain’s potential to provide authentic and reliable transaction records, but warns that it could still be years before it permeates business and government structures. Cassar reminds us, “Going by our experience of technological innovation, many barriers would need to fall in the meantime.”
A Foundation, Not Disruption
Interestingly, Cassar posits that blockchain should not necessarily be viewed as a disruptive technology. Rather, it serves as a foundational tool capable of constructing new platforms for both economic and social infrastructure. This distinction can ease concerns for traditional financial entities who worry about their imminent obsolescence.
Understanding Cryptocurrencies and Payment Technologies
Cassar draws a crucial line between currencies and payment technologies—“the currency is the ‘what’ while the payment technology is the ‘how.’” This insight highlights that cryptocurrencies act as mediums of exchange, but the actual payment systems operate separately. However, questions remain surrounding the definitions and regulations of cryptocurrencies, leading Cassar to state that while they pose some risk, they don’t threaten traditional banking in the short to medium term.
The Ripple Effects of Cryptocurrencies
Despite the risks attached to cryptocurrencies—namely volatility and money laundering—Cassar is confident they are “here to stay.” He foresees a future where improved regulations could create first-mover advantages for those daring enough to embrace change. Yet, traditional banks must navigate carefully as the role of payment intermediaries becomes increasingly challenged.
Malta: The ‘Blockchain Island’
Dubbed the “blockchain island,” Malta has garnered attention for welcoming several major cryptocurrency exchanges. Notably, Binance has recently established a bank account there, edging closer to offering fiat-crypto transactions. Cassar acknowledges the “unknown and unprecedented compliance risks” that come with these developments, urging banks to enhance their risk management and compliance capabilities.
Looking to the Future
As Malta continues to forge its path in the crypto sector, especially in light of the EU’s TAX3 investigation, it remains a trailblazer with favorable tax laws and new legislative frameworks. With groundbreaking innovations on the horizon, the journey into the crypto landscape may be less of a wild ride and more of a carefully navigated journey. Cassar’s insights remind us that while the destination is exciting, it’s the careful planning that will ensure success.
