Banks are increasingly talking about bitcoin not as a curious anomaly but as a both a concern and potential business opportunity. Billy Bambrough takes a look at the reasons behind Santander’s decision to commission the study
t the end of August, Santander decided that the time had come to try and figure out what all this bitcoin nonsense was about and get to the bottom of whether it is going to put the banks out of business or if it’s a tool it can integrate into its current products.
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With the goal of the report to "Analyze the impact of bitcoin and other cryptocurrencies on banks and devise a strategic course of action" the bank has its work cut out for it to try and figure out how bitcoin is going to affect the industry long term.
The study is being facilitated as a challenge through Yegii, an ‘insight network’ founded by Trond Undheim. Undheim is also a Senior Lecturer at MIT Sloan School of Management, as well as Managing Director at Tautec Consulting.
The challenge was initiated by Julio Faura – Head of Corporate development for Banco Santander. According to Undheim, Faura was "looking for additional outside perspective onto the topic of Bitcoin. While acquiring consulting services from top tier consulting firms can be exciting, he thought that an outsider, multidisciplinary perspective, would be particularly helpful."
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By GlobalDataUndheim is looking to build a ‘dream team’ of multidisciplinary experts in management, science, engineering, banking, as well as Bitcoin, "ideally from different continents, and to include both believers and skeptics."
He believes this challenge is a great opportunity for bitcoiners to express their opinions, as well as acquiring "the support of a major multinational bank that is very forward thinking," read the announcement.
Santander has been criticised for the low price it put on the value of a report that was asking so much, giving the report a budget of just $5,000.
In a report market were individual reports will often retail for as much as $5,000, many have speculated that Santander are more interested in the endeavour as a publicity stunt. The Santander Group is not the first bank to commission a study focused on cryptocurrencies.
Last year the National Australia Bank published a brief research paper on the matter which tried to explain the basics of bitcoin. It concluded that it would take "many more years" for the currency to achieve mainstream acceptance.
Dutch banking company ING also released a video report which debated whether bitcoin meets the traditional definition of money.
Just last month, the World Bank published a policy research working paper on Ponzi schemes, which described bitcoin as a "naturally occurring Ponzi".
The report found that bitcoin had no characteristics of a deliberate Ponzi scheme, but was a "market-driven bubble" much like gold or real estate bubbles witnessed in the past.
