The German banking industry association Bankenverband (BdB) recently said that it believes that blockchain technology may have a significant impact on financial markets.
In a new document, BdB’s Digital Agenda Committee responded to member questions on how it believes developments in the field of financial technology will impact the domestic banking industry, speculating that the blockchain could affect the stock market and payments sectors.
The comments come in response to a question that centered on whether large technology groups such as Amazon, Apple, Facebook or Google could leverage cryptographic financial systems as a way to disrupt banking. Of note for the inquirer was the recent decision by the European Court of Justice that bitcoin transactions in Germany would be exempt from value-added tax (VAT).
In its remarks, however, BdB was less than optimistic about the use of bitcoin by these companies saying that it remains to be seen if it will be used by consumers given that it is currently “impractical in everyday life”.
The organization continued:
“Much more relevant to the developments in the financial services industry is that which lies behind bitcoin, the blockchain technology. Blockchain technology has the potential to revolutionize the entire present-day settlement system in the securities sector.”
Still, the group cautioned that customer reactions to the technology “cannot be estimated today” and that commercial applications of blockchain technology may create “opportunities or risks”, making its assessment largely speculative.
BdB boasts more than 200 German banks as members, with more well-known members including Deutsche Bank and Commerzbank, institutions that are currently openly working on blockchain projects through a partnership with industry startup R3.
Mark Preuss contributed reporting.
German parliament image via Shutterstock