SWIFT Panel: Bitcoin Threatening Our Banking Model

A panel discussion on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, held by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) at the Marriott Marquis in New York, shed some more light on how much the global banking system is becoming aware of Bitcoin as a payment system.

SWIFT's network links over 9,000 financial institutions in over 200 countries, allowing them to communicate with secure payment order messages, currently numbering over 15 million per day. The network does not settle or clear Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, functions which are performed by the banks themselves.

With some having previously declared that "correspondent banking is dead" and that "the wire" is no longer adequate for real-time payments, the panel acknowledged that the system is ripe for disruption. Said Cheryl Gurz, managing director of the emerging technology segment at Bank of New York Mellon Treasury Services:

"If we as traditional correspondent bankers don’t keep looking and determining where [cryptocurrency technology] will take us, new entrants will completely take our space."

Under consideration was both the use of "crypto-protocols" to send payments, as well as their potential to inspire a wave of innovation to develop technologies capable of keeping pace. Added Gurz:

"What is the technology that is enabling Bitcoin currency to move effectively with more visibility and at lower costs. How can we take that into our current systems and make them more efficient, faster, cheaper and more transparent?"

Also on the panel were Marc Hochstein, editor in chief of American Banker, and Houman Shadab, professor of law at New York Law School. Shadab pointed out that, in fact, Bitcoin's transparent ledger can be highly beneficial as evidence for prosecuting against crime.