According to the chief executive of Swiss lender UBS, while the technology behind creation and the use of cryptocurrencies will be pivotal in transforming the financial services, the cryptocurrencies themselves still need to be “defined” to be universally acceptable.
Sergio Ermotti, the CEO of UBS, was “not necessarily” a believer in cryptocurrencies even though the bank has seen success in its trade finance blockchain platform, he told the media in an interview.
“Not necessarily cryptocurrencies, I think that needs to be defined, but I believe there is a future for blockchain technology, and technology will play a big role in changing and reshaping our industry”, he said when asked whether he liked virtual currencies.
Instead of at one single location, blockchain allows data to be stored across a network of computers around the world and this technology is also known as the distributed ledger technology.
UBS, along with other banks, including Commerzbank and Bank of Montreal and partnering with technology giant IBM, has been involved in a blockchain project — called Batavia.
“Our strategy there is very simple. We try to initiate and get as many other financial institutions and clients into teams like trade finance with other banks and IBM was a successful venture,” Ermotti said.
Ermotti added that the technology would form an ecosystem that enables financial institutions to “operate and transact at a cheaper, more efficient level.”
UBS’s earnings results missed estimates from analysts at Thomson Reuters even though the lender posted a 14 percent rise in net profit on Friday.
The bank executive believes that most banks are fond of blockchain and not bitcoins. And similar sentiments on cryptocurrencies like bitcoin have earlier been expressed by several banking executives.
Having previously called bitcoin as being a “fraud”, one of the most notable critics of the digital token has been JPMorgan’s Jamie Dimon.
The CEO said: “I could care less about bitcoin. I don’t know why I said anything about it.” But Dimon said he liked blockchain, adding: “The blockchain is a technology which is a good technology.”
Bitcoin was “getting a little bubblish”, said China Renaissance CEO Fan Bao to the media earlier this week.
“I think we have to separate bitcoin from the blockchain,” the investment banker said. “I think blockchain is very exciting technology, probably the most disruptive technology in our industry, the financial services industry.”
(Adapted from CNBC)