Blockchain technology might bring in a completely new era of doing business, Deutsche Bank chief investment officer has said.
This is according to Christian Nolting, Deutsche Bank’s Chief Investment Officer and Head of Global Wealth. In a slide presentation earlier in December, the official put in plain words the working of blockchain and digital currencies. Marcus Mueller, who heads the global CIO office, echoed the same sentiments as the two bankers concurred on the future trajectory of the blockchain technology and cryptocurrencies. In their own words, “opportunities associated with blockchain technologies are huge,” and might become fully operational in the near future.
According to the bankers, Blockchain will track or regulate nearly 10% of the world’s Gross Domestic Product (GDP) by 2027.
The presentation stated:
“We expect that the blockchain will change the business model of companies in a sustained way. The blockchain technology enables a faster and cheaper exchange of assets and financial products between individuals without an (intermediary), which reduces the symmetry of information between the individuals.”
Tepid on Currencies
Despite the promising nature of blockchain technology, cryptocurrencies are not as promising, according to the speech. For that reason, Deutsche Bank classifies cryptocurrencies as “highly speculative” based on the absence of inherent value and a central bank support. According to the presentation, digital currencies could provide a substitute for FIAT currencies, especially in countries with runaway inflation. Even so, they still require more regulation and adequate security to qualify as proper assets.
Evolution of Crypto Currencies
Generally, cryptocurrencies could change in several possible ways. Main factors that can affect the growth are government intervention and the competition among different digital currencies. In addition, hard forks might also create new currencies. This presents a growing cause for concern, as it might lead to inflation. According to the presentation, “central banks could create their own cryptocurrencies and replace the private ones in the market.”
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