Virtual Currency Ready to Disrupt Banks, Expert Panel Says at GROW

Bloomberg News tech reporter Douglas MacMillan sat down with Simple CFO Shamir Karkal and OpenCoin CTO Stefan Thomas to discuss the future of currency.

MacMillan asked the two-person panel what should a modern currency be? Thomas says it must be something that can’t be duplicated (fake paper currency remains a massive problem worldwide) and Karkal says it must be easily accessible in real-time.

But is Bitcoin the solution? Depends on who you ask. But hearing it from Thomas and Karkal, some type of digital currency—whether it’s Bitcoin, something similar, or something that doesn’t yet exist—is going to disrupt banks and evolve the business model of managing one’s day-to-day money for the first time in quite a while.

“Banks rely on customer confusion for a large portion of their revenue. Most of their fees occur when a client screws up, so they have an incentive to help their clients screw up,” explains Karkal. He hopes his company and others like it can leverage digital currencies to create customer-centric banking solutions.

“There hasn’t been enough pressure on banks,” Thomas says; “banks will always exist but in the future will look nothing like they do today,” adds Karkal.

“It’s still early in virtual currency technology and I still carry paper money in my pocket. How soon will adoption reach the broader consumer?” MacMillan asked the duo.

“The recession proved that banks are not invincible,” Karkel replied. “Today, banks don’t have that much of an advantage.”

“New technologies that provide a genuine alternative will be adopted,” added Thomas. “Right now using Bitcoin isn’t convenient. But apps are changing that. Eventually the experience will be streamlined and these new technologies will find adoption.”

There’s a bit of a battle between banks and technology companies, including big ones like Apple and Google. Banks are not innovative but they have regulators and a legacy of trust on their side, while technology companies are using creativity and innovation to bypass the need for consumers to use the services of banks.

MacMillan ended the panel by asking for 10-year predictions.

“I predict that in 10 years people will be able to open a bank account in a foreign country just because you’re staying there for a week,” Thomas said.

“I predict you will be able to do your entire banking experience on a smartphone and go months or even years without entering a physical bank or using cash,” said Karkal.