Whenever a bank makes a positive statement on any aspect of Bitcoin, the digital currency community is both excited and worried at the same time. Most of the community want banks to adopt the Bitcoin technology for their financial services, even though that might bring even stiffer competition to the monetary aspect of Bitcoin itself.
Santander: “Bitcoin Has a Lot of Use Cases.”
In Spain, most of the banks are warming up to the idea of Bitcoin and its underlying technology. As we have seen from initiatives such as Chip Chap, it is possible to use major bank ATM’s to convert Bitcoin to fiat currency, even if you are not a customer of that financial institution.
On top of that, Spain is one of the handful of European countries which is on the brink of – yet another – bankruptcy. The population is flocking to alternative currencies faster than you can say “paella”. Digital currency opens up quite a few interesting aspects for the everyday consumer, as you can easily exchange Bitcoin to any other major currency in the world.
It should come as no surprise then that quite a few banks around the world are eyeing blockchain technology to implement it in their locked-down financial ecosystem. With its transparent nature, and possibilities ranging from asset issuance to tracking items, or even smart contracts, the possibilities are practically endless.
That being said, Spanish mega-bank Santander took things one step further and recently released a research paper listing quite a few Bitcoin use cases. Most of these use cases focused on the financial aspect – as you would expect – but Santander also calculated how much money the banks could save by adopting blockchain technology. And that number is quite staggering.
Bitcoin Use Cases & Cutting Down Costs
In the perfect world, banks would not think twice about integrating blockchain technology into their infrastructure. Doing so would not only be beneficial to all customers of every bank, but it would also save financial institutions up to US$20 billion per year in costs. And some banks have already started exploring the possibilities of what this disruptive technology can do for them.
“Commercial banks, central banks, stock exchanges and major technology providers, such as IBM and Samsung, are all exploring the potential uses of distributed ledgers […] It is only a matter of time before distributed ledgers become a trusted alternative for managing large volumes of transactions.”
Santander’s InnoVentures initiative – a US$100m FinTech investment fund – has been looking into several use cases that could be beneficial to the Spanish bank. One of the hot topics of discussion is smart contracts and their future implementation, which would allow Santander to transform many of the services they offer.
“What we see as the foundation use case, which is international payments, we don’t really need a coalition of 50 banks to make it work. We have ten major geographies. Just us connecting our ten major geographies will allow 100 million customers to make instant payments worldwide. If we partner with two or three banks similar to us we’ve got pretty much global coverage.”
Source: FinTech 2.0 Paper
Images courtesy of Santander, Shutterstock