Standard Bank talks Bitcoin and blockchain technology

Standard Bank is launching a series of events to explore the benefits and risks of emerging technology solutions in the world of financial services.

“If harnessed correctly, powerful technologies like blockchain can unleash new avenues for growth and revolutionise the way Africans bank,” said Naomi Snyman, Blockchain Lead at Standard Bank Group.

There is, however, a misperception that banks are scared of, or reluctant to, engage with emerging technologies.

“We need to debunk that myth as we harness emerging technologies like blockchain to drive change and improve efficiencies. More importantly, we are unlocking the power of collaboration by partnering with entrepreneurs and individuals on their future journeys,” she said.

The bank is partnering with Blockstarters at the launch of the series on October 11. The first talk will unpack cryptocurrencies, their impact and how they can enable the payments landscape of the future.

Entering new markets is daunting enough, but a lack of insight, support and a diverse network can often see good ideas and products failing to get off the ground. “We are therefore creating a powerful learning platform that will help businesses and entrepreneurs with great ideas to navigate the complex marketplace. This includes creating market access opportunities but most importantly, building the awareness and knowledge to reduce risk and achieve success,” said Snyman.

For instance, with the “storm” over Bitcoin over, it is opportune to analyse the protocol innovation which drove its success while also understanding its shortfalls.

“Its intent was to completely disrupt, allowing peer-to-peer transactions to take place without the need of a third party. However, it is really important to make the distinction between cryptocurrencies such as Bitcoin and blockchain. The benefits that blockchain provides are much wider and more appealing than just cryptocurrencies, but that does not mean cryptocurrencies will not have a role to play. For instance, the initial coin offering frenzy may appear to be over, but we need to understand how this can enable new forms of value transfer and payment mechanisms,” said Snyman.

Standard Bank noted that South Africa’s central bank has taken a proactive stance on cryptocurrencies by creating a private crypto-currency unit.

“The role of regulation is often not well understood when you talk about cryptocurrencies and blockchain, but our central bank has realised it has a crucial role to play as the industry begins harnessing the benefits of a decentralised ledger. A future that may include borderless currencies and cross-border virtual money flows in Africa will need them as a key player,” said Snyman.

“While decentralisation is seen as the ultimate vision, this needs to be tempered by the fact that payments, digital identity or digitisation of assets will need central bank approval and so the ideal model will be based on multi-party collaboration,.”

Standard Bank said it supports both open and permission-based blockchains. Permission-based blockchains add an extra control layer and only specified parties, such as a bank and approved clients, can transact and validate the network.

“There is potential for both of these models as while an open system will drive growth and expand the eco-system, private permission-based blockchain will play a big role as confidentiality of customer data and transactions remains paramount,” said Snyman.

Blockchain forms part of Standard Bank’s broader digitisation strategy, which goes further than just looking at payments to include trade finance, digital identity and global markets, the bank said.

“It ties into our vision to drive Africa’s growth, which will increasingly come from new small businesses, cross-border trade and finding new business use cases to revolutionise business models,” said Snyman.

Read: Standard Bank sets aside R10 billion to fund energy projects

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Standard Bank talks Bitcoin and blockchain technology