In a nutshell – transparency and honesty is less profitable that financial shenanigans behind a centralised ridable ledger called a bank. And I still don’t have the answer to who regulates the regulators?

Blockchain is the 21st century problem solver – in my view one of the most significant application of the internet and the most significant invention since the internet.

All hail the Blockchain.

Here is the original blog post from the publisher that conducted the interview FinTech Innovation

In the Fortune story “Why banks fear bitcoin”, Trond Arne Undheim, a senior lecturer at MIT Sloan School of Management” said the “virtual currently is likely to decentralize banking services.” His view may well be a reflection on how money is created and controlled.

There is an old adage: “who makes the gold, makes the rules.”

Governments, and through banks, across the world authorize themselves to print paper money. They control how much money is circulated. As consumers, we have the right to use the money but do not own the money.

Bitcoin proponents hold the view that this power of governments and banks to control the creation, circulation and eventual destruction of money, results in a lack of transparency in terms of accountability for the value of money.

Simon Dixon, co-founder and CEO of, explains the difference between the money as controlled by banks versus bitcoin. Himself an ex-investment banker, he explains that most people do not know the complexity behind the creation of money.

The transparency that the Bitcoin protocol offers may also be one of its biggest hurdles in the current quest to be recognized as a legitimate currency for trading. Globally all financial regulators, and governments, mandate financial institutions to enforce the “Know Your Customer” (KYC) controls as part of anti-money laundering and counter terrorism efforts. The lack of central regulatory oversight means banks must do their own policing of digital currency to ensure they do not become liable to governments and industry regulatory bodies. This self-policing requirement means more work, extra cost and additional risks banks are not happy to volunteer to take on.

At present, regulators in some markets have assigned the term “asset” to crypto currencies like bitcoin. This designation allows bitcoin to be traded like other financial assets. Hence, the fluctuating value of bitcoins as speculators trade on the crypto currency hoping to make ‘real’ money in some future period.

Banks, themselves, are also observing developments around crypto currencies to understand the technology and the potential business that can be derived from the innovation. For the moment, focus is shifting to blockchain – the distributed ledger of Bitcoin. The September 2014 paper published by the Bank of New England calls Bitcoin a significant innovation with far-reaching implications.

In a Wall Street Journal interview, Oliver Bussmann, group chief information officer of Swiss bank UBS, is quoted as saying “I believe — and this is my personal view — that blockchain technology will not only change the way we do payments but it will change the whole trading and settlement topic.” He believes that blockchain has the potential to trigger massive simplification of banking processes and cost structures.

Simon Dixon

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