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Bundesbank President Jens Weidmann, a member of European Central Bank’s Governing Council, has recently called for sweeping regulatory oversight of the Blockchain.
Bundesbank President Jens Weidmann, who is also part of the European Central Bank’s Governing Council, has recently called for sweeping regulatory oversight of the Blockchain. Weidmann is convinced that fintech has immense potential to threaten financial stability and the banking sector.
Cointelegraph decided to sort the views of Matthias Klees, a former advisor in Brussels and CEO of EuropeCoin about this.
Cointelegraph: What's your response to Bundesbank President Jens Weidmann's call to regulate Blockchain and distributed ledger since it poses a threat to the Banking industry?
Matthias Klees: Well, it's funny to get a recommendation from Jens Weidmann, CEO of the bank, named "the most dangerous bank for world economic stability," by the IMF, two years ago. But let us dig deeper and forget about banker bashing. His speech is part of a broader discussion dialog, started by an IMF report in the beginning of 2016.
If you read the IMFs statement, you will see a deep and clear understanding of Bitcoin and of Blockchain technology and you will see an unexpected support to embrace this innovation. Jens Weidmann's call is the expression of some fundamental disagreement with this IMF report. He can't really hide, he would love to stop Bitcoin and to preserve Blockchain for the banking business and his anger to find out that the IMF didn't care about his desire.
Also, because he can predict Bitcoin to be embraced by the IMF and Deutsche Bank in risk to lose its impact, he tries to position himself between Bitcoin and the IMF as an "oversight institution." He highlights the capabilities of Deutsche Bank in the field of monitoring and market analytics and hopes to get in the middle of IMF, EZB, and BIS, to get more control. You have to keep in mind that Deutsche Bank currently has to deal with countless penalties for its unlawful market activities.
As a result, Deutsche Bank has to pay fines in an amount that could be seen as an existential threat to this institution. Jens Weidmann is aware that Deutsche Bank can't afford to get irrelevant to the monetary system.
CT: Is there any possibility such calls from Weidmann could harm the fintech industry?
MK: No, though Deutsche Bank has a strong impact on decision making it has been facing its total loss of trust and its worst economic status ever. So at the moment, Deutsche Bank has to get rid of its "bad actor" status.
Given their powerful data analytics capabilities, Jens Weidmann may likely succeed to establish his bank as a market monitoring and oversight institution. He will just be able to provide advice and reporting. Deutsche Bank is too deep involved in fintech to be able to use this position in a harmful way.
CT: Do you think instead of the banking sector fretting over the impact of Blockchain and fintech they should embrace the technology?
MK: The commercial banks are knowing, they are regulated, too inflexible and too slow to adapt to this revolution. They could have done right by embracing it early enough. But they did not do that and now they are doing right to fear their own future.
In contrast, international institutions like IMF, BIS, EZB, FSB, don't have to fear to lose their positions like the commercial banks have to. They don't care what money they are using while doing geopolitics. They are feeling rather safe and their speech matches up to that fact by embracing this useful technology.
This difference is an interesting new fact: You are witnessing Bitcoin demonstrating its "soft-transitional-power" for the first time on the international monetary level, by creating a split of interests between monetary institutions and conventional banking business.
CT: Are these fears and reservations in the interest of Cryptocurrency and Blockchain technology?
MK: No, of course not. Banks are powerful institutions with great resources. They would have been much more useful as a partner.
And still, it is in our interest to include them as much as we can instead of creating a new powerful enemy. We should never forget to stay on the path of Bitcoin as an unaggressive revolution in favor of a smooth tradition.
CT: How does the future look like?
Banks have no intention to stop this industry. They know better than anybody else that it is too late to try. Their concerns are just emerging from their efforts to position themselves in this coming environment.
Banks will continue to put money into this economy and will, in that way, reach a point where the smooth transition will be in their own interest. Whether we or they like it or not: They will be one of us sooner or later.
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