Bank of America CTO “Privately Bearish” on Blockchain
An executive at Bank of America has recently put forth comments which go against the growing adoption for cryptocurrency and blockchain in 2019.
According to a report published by CNBC on Mar. 26, Bank of America’s tech and operations chief Cathy Bessant says that she is “privately bearish” on the outlook for blockchain and its potential impact for financial technology. Despite her comments, the CNBC also points out that the bank has 82 blockchain-related patents, which amounts to more than any other bank or financial firm including that of Mastercard and PayPal.
In an interview, Bessant cast doubt on the impact of blockchain in the near-term, and gave her personal opinion that the technology would fail to achieve the prominence some industry supporters believe will occur,
“What I am is open-minded. In my private scoreboard, in the closet, I am bearish.”
Nonetheless, Bessant’s private opinion on blockchain does little to diminish the dramatic steps Bank of America has taken over the last several years to prepare itself for a future of blockchain and digital assets.
As CNBC writes,
“For half a decade, Bank of America has quietly been preparing for a future in which the world of finance migrates to the blockchain.
Under tech and operations chief Cathy Bessant, the giant bank has accumulated the most patents for the technology of any financial services company, for inventions ranging from blockchain-powered ATMs to storage for cryptocurrency keys.”
While supporters of blockchain have argued that the technology is in need of more time to develop, with adoption being a slow process to start, Bessant claims that it’s more an issue of blockchain searching for a use case as opposed to being an obvious source of improvement. Bessant says she is focused on supporting technology that will help finance and significantly improve upon existing methods–two features that she finds lacking in the current state of blockchain,
“I haven’t seen one [use case] that even scales beyond an individual or a small set of transactions. All of the big tech companies will come and say ‘blockchain, blockchain, blockchain.’ I say, ‘Show me the use case. You bring me the use case and I’ll try it’.”
“I want it to work. Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, all of those things.”
In regards to Bank of America’s stockpiling of blockchain-based patents, which Bessant has overseen since starting her position in 2010, the executive views it as a method of future proofing. Rather than allowing Bank of America to blindsided by a wave of blockchain adoption and innovation, Bessant–despite her personal doubts–is preparing the company in the event that the technology lives up to its potential.
Bessant also claimed to be most skeptical over public blockchains like Bitcoin and other cryptocurrencies. Instead, she finds greater use in private blockchains that provide intermediaries for use, similar to the stablecoin that is being developed by J.P. Morgan Chase.