Cryptocurrency Bitcoin: Disruption, challenges and opportunities

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Abstract: Cryptocurrencies such as Bitcoin are a hot topic in the financial industry. Looking specifically at the purpose of cryptocurrencies for making payments, this paper aims to illustrate (1) the key challenges that cryptocurrencies must overcome to achieve widespread customer adoption, (2) the major risks regarding cryptocurrencies, when and how cryptocurrencies and their service providers will be regulated, (3) in their current state, what are the killer apps for cryptocurrencies, and (4) the more fundamental issues cryptocurrencies must address. In conclusion, while Bitcoin may not replace traditional and new payment methods to become a dominant alternative in the short term, banks should look at its underlying technology as a potential generic new way to transfer ownership of value in the longer term.

Keywords: Bitcoin; cryptocurrencies; alternative payment methods; payments

Wim Raymaekers manages SWIFT’s banking and treasury markets worldwide, and is responsible for defining the evolution of its core banking value proposition in view of changing customer requirements and industry business models. His mission is to help banks to grow their business, achieve operational efficiency and reduce costs, and improve their liquidity risk management. His responsibility also includes identifying new trends in correspondent banking, eg cryptocurrencies, international person-to-person payments, mobile payments, RMB internationalisation, intraday liquidity reporting, OTC derivatives and assisting banks in embracing these in their strategic product offering. Wim moved into his current role in July 2009. He is based at SWIFT’s headquarters in La Hulpe, Belgium. Prior to joining SWIFT, Wim has worked at Fortis (now BNP Paribas) and the accounting department of a high-tech company. Previous positions at SWIFT include senior management roles in corporate cash management, connectivity channels and e-commerce. Wim has a university degree in Commerce and a postgraduate Master’s degree in Information Technology. He is fluent in Dutch, French and German as well as English. This paper is based on the author’s blog, released as prelude to the Innotribe sessions at Sibos 2014.