“They are given free rein to run absolutely anti-competitive behaviour against the one competitive threat they’ve had in the last 50 years, that they cannot buyout, co-opt, sue, shut down or stomp out of existence,” Andreas Antonopoulos said at a Blockchain conference held in New Zealand.
“I think governments should be willing to go for this, because they talk very loudly about things like fintechs, sandboxes and so forth, and this seems like a contradiction,” Vitalik Buterin, Ethereum’s founder, said.
The very strict approach of banks towards blockchain businesses has been a simmering issue in this industry with the topic brought up yesterday at a European Parliament workshop exploring blockchain technology.
A blockchain based entrepreneur, who works in a project that tokenizes fiat money, stated that opening a bank account as a blockchain business was a very difficult process and wondered whether regulators could assist on that specific point.
Jakob von Weizsäcker, a German politician and Member of the European Parliament, stated that EU members from the anti-competition department should be in attendance, but were not, passing on the question to John Whelan, director of Santander Blockchain Lab.
Whelan stated blockchain businesses were not a direct threat to banks, further explaining that they have to comply with strict anti-money laundering regulations which a fiat token couldn’t easily comply with as once its turned into a token it can freely move.
Banks, of course, are in the business of moving money. Taking them from some, giving them to others, storing them into accounts, sending them to other accounts.
If all of this is happening with no banks involvement then one would think they would miss from, say, the around $6 billion a year they charge for going over the overdraft just in United Kingdom.
The New Zealand regulators, however, said they were perfectly happy with the bank’s approach according to a Kiwi financial site, which was told by the Reserve Bank of New Zealand (RBNZ):
“We’re generally comfortable with banks’ approaches to cryptocurrencies. To date, cryptocurrencies haven’t been a large feature of the financial system in New Zealand. We keep a watching brief on cryptocurrency issues.”
The blockchain entrepreneur said he had gone through FCA’s sandbox, found to be perfectly in compliance, yet still opening a bank account was a very difficult process. It isn’t therefore quite clear whether this is a matter of compliance or whether banks are erecting barriers.
Regulators, however, have given no indication they will take any action in any country. Quite an opportunity, presumably, for one of the jurisdictions, but much of the system is sort of streamlined and, as we saw from banks cutting off Bitfinex, it’s kind of headed by America, so it isn’t clear whether non-American regulators can take any action.