Over the course of 2017, bitcoin saw a 2200 percent run-up in value — but it has been a volatile ride. This week alone, the virtual currency plunged 34 percent in a matter of three days. Aside from the recent bitcoin mania that is seeing a wave of “initial coin offerings” and goosing the stock value of companies that announce virtual currency plays, the underlying technology — known as blockchain, or distributed ledger technology — has attracted significant interest from financial institutions and investors.
“It’s a technology that banks are very excited about,” says ABA VP Rob Morgan in the latest episode of the ABA Banking Journal podcast — noting that Bank of America owns more blockchain patents than any other company, even blockchain-specific companies. “The type of problems blockchain solves best for are really coordination problems,” he adds, which is why early use cases are focused on cross-border payments and trade settlement, for example.
Morgan and virtual currency expert John Collins join co-hosts Evan Sparks and Shaun Kern for a 20-minute conversation on what bankers need to know about bitcoin and blockchain. The conversation covers the growth and use of virtual currencies, financial crimes concerns related to virtual currencies, the underlying blockchain architecture, what makes it attractive to financial firms and some real-world blockchain deployments at banks.
If you can’t see the audio player above, click here to listen to this week’s episode.