Daniel Masters, a senior trader at JPMorgan Chase and the executive chairman of CoinShares, said in an interview with Forbes recently that blockchain technology may lead to the demise of commercial banks, especially after the global financial crisis leads to the end of the commodity super cycle , The huge potential of cryptocurrency and blockchain has been released, bringing many innovations to the traditional financial industry.
Daniel Masters first worked for Shell Oil Company, then he went to Salomon Brothers, a well-known Wall Street investment bank, and eventually became one of JPMorgan’s most well-known traders. In 1999, Daniel Masters had already held two large hedge funds, and then he bet on the development of the Chinese market and succeeded. At that time, due to the large domestic consumption of goods, it provided Daniel Masters with huge business opportunities. Helped him find the “first barrel of gold”, because at that time the price of oil was only US$10 per barrel, the price of copper was only US$2 per pound, and the price of gold was as low as US$1,300 per ounce. All rose mid-year. However, since 2012, the commodity boom cycle ended, and the Fed’s quantitative easing policy has also led to a shrinking of the value of traditional assets.
Daniel Masters believes that Bitcoin essentially provides an Internet version without copy/paste function, but it is not easy to really enter the Bitcoin industry. First of all, compared to traditional commodities, clarify the investment thesis of Bitcoin It is much more difficult; secondly, there were indeed many scams in the early stage of the Bitcoin industry, which also made people more suspicious of Bitcoin. For companies that provide cryptocurrency services, it is necessary to eliminate customers’ doubts about the trust framework products they invest in.
So how will the cryptocurrency world develop in three years? The answer may be central bank digital currency. Central banks in various countries are now exploring the issuance of their own digital currencies. The central bank’s digital currency has great potential, allowing you to combat the black market and corruption without having to personally “touch” or move the currency. It can also provide real-time accounting functions, but if you withdraw physical cash from the financial system, negative interest rates may be enforced. At this stage, eight central banks around the world are ready to issue central bank digital currencies. Among them, China and the Bahamas are the most noteworthy countries. The digital renminbi is obviously more important. There are many interesting developments in the central bank’s digital currency world. For example, the digital renminbi will become stronger, and the United States will be forced to respond, either in the form of a digital dollar or in the form of a trade war.
There is no doubt that the central bank’s digital currency will have an impact on commercial banks and the entire financial system. In the traditional financial system, the Federal Reserve issues currency to many commercial banks such as JPMorgan Chase and Bank of America. Commercial banks directly deal with end customers and do two things: develop mortgage products and provide mortgage services. But in the central bank digital currency world, commercial banks may no longer exist, and the service layer has actually produced a number of decentralized financial protocols, such as Compound Fiance, Uniswap, Sushiswap, etc. Take the decentralized P2P lending service Compound Finance as an example. The funds they manage have reached billions of dollars, and the blockchain has made the lending business more transparent, remote and autonomous, and the effect is even better than that of Citibank. , Just like streaming service provider Netflix subverting BesTV, but it seems that until today BesTV has not figured out what Netflix’s real function is.
Not only that, but there is also a service layer that really faces consumers. Today we have seen many choices, such as exchanges such as Coinbase that are eager to get user support, and wallet infrastructure such as Blockchain.com. Not only that, many large companies around the world are exploring digital currencies. For example, smartphone manufacturing giant Samsung is putting chips into mobile phones to turn their phones into hardware wallets, and e-commerce giant Amazon may also launch a digital wallet.
Compared with the digital industry, the traditional financial industry is more “clumsy” and it is more troublesome to split traditional financial assets. Stocks are relatively better, but gold and real estate cannot be truly split. Therefore, the traditional financial market has launched a transitional product: exchange Exchange-traded funds (ETF), but the problem is that ETFs have too many “intermediary” service providers that are not needed at all. These problems will stifle innovation.
In the future, everything will be tokenized. When the central bank understands this, the development of the digital currency industry is bound to accelerate further. After that, Bitcoin is likely to play the role of gold in the traditional currency field. The middle layer (service layer) will change. It has to be more automated and technical.
