FNB CEO on why he won’t use Bitcoin on the bank’s platform

Despite cryptocurrency Bitcoin celebrating its 10th birthday in 2018, FNB CEO Jacques Celliers remains a skeptic.

Speaking at an informal end-of year event in Sandton on Wednesday, Celliers said that he is excited to continue to play a part in disrupting the financial service industry in South Africa. He said that the company is investing huge sums of money into ‘re-configuring’ financial services.

“There is not a single part of our organisation (First Rand) that we are not properly, properly reinventing,” Celliers said.

He stressed that the company remains mature in its approach – it asses the impact that technology could have on society.

He said that the business is becoming more mobile. “One of the things we are trying to do is disrupt ourselves. I don’t have a desk, I don’t have an office. I gave up my office about two years ago. I also don’t have parking bay.”

Like many corporates, Celliers said FNB has been cautious in its approach to adopting new ‘tech’ like Bitcoin. “The reason why don’t put blockchain or Bitcoin on our systems today, is because I can’t associate my brand with it yet. It is a simple as that. I can’t trust it yet.”

He said that these types of technologies will mature over time.

Financial services is not about gadgets, he said, adding that FNB has enough developers and IT guys to build or fix anything.

“It’s not a technology challenge, its not a data challenge – we’ve got more capabilities on data than anyone. It’s not a challenge of a tool – it’s a challenge of trust.”

In October, Standard Bank said it would launch 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.

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

Having reached insane highs a little over a year ago, Bitcoin has seen steady decline in 2018, finishing down for a third consecutive month on the anniversary of its creation. Bitcoin’s value has decreased by about 18% since the beginning of August and more than 50% since the start of the year, Bloomberg reported.

“Bitcoin, and other digital tokens, have been burdened by regulatory scrutiny of trading platforms. Regulators have voiced concern over money laundering and customer protection tied to digital currency transactions. At the same time, adaptation has been slow.”

“Currently the so-called cryptocurrency market is not what the Satoshi white paper envisioned it to be,” said Mike McGlone, a Bloomberg Intelligence analyst. “Hopefully we will get there, but the current plethora of speculative cryptographic assets remains too volatile, with most of the supply and demand indicators pointing to continued declining prices.”

Bitcoin’s volatility has plunged to its lowest level since late 2017, before a rally that saw its value increase to an all-time high of $19,511 in December 2017. It is trading around $6,450 today.

However, optimism still abounds for the cryptocurrency.

Bitcoin’s muted volatility is a result of maturity within the asset class and a gained comfort of valuation — not so much a lack of interest from market participants, David Tawil, co-founder and president of Maglan Capital told Bloomberg.

He pointed to the latest development from Fidelity Investments, which recently announced a cryptocurrency business that serves Wall Street clients.

“There is a lot of development going on, relating to infrastructure and direct investment,” Tawil said. “The fruits of the those labours will begin to manifest soon.”

And despite its decline in interest from December peaks, a large percentage of South Africans are still interested in purchasing digital currency, according to an independent survey conduct by Luno across emerging markets including Indonesia, Malaysia, and South Africa.

More than half of South Africans said they were interested in purchasing a cryptocurrency.

Read: How many South Africans still think Bitcoin is a bad idea – and those that wish they had invested