2013-05-05 Bloomberg - Lenders May Create Bitcoin Rivals, Says NZ Bank Group

[kiko]

http://www.bloomberg.com/news/2013-05-05/lenders-may-create-bitcoin-rivals-says-new-zealand-bank-group.html

Gossip and FUD from the media's finest minds:

Commercial banks may create digital currencies to rival Bitcoin, the virtual money whose U.S. dollar value collapsed by 46 percent in 24 hours last month, the head of New Zealand’s banking lobby said today.

“If it’s not Bitcoin it might be some other type of digital currency that could come into play,” Hope said. The cap on Bitcoin issuance, which limits supply to about 21 million units, “doesn’t mean that some other player couldn’t come into the market, and, you know, that might be a bank.”

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[solex]

Imagine the new pastime for bored members of Anonymous and LulzSec: 51% attacks on Bank-coins issued by various large banks.
Can't see any of them surviving without huge distributed systems comparable to that which Bitcoin has organically acquired.

[Peter Todd]

Gossip and FUD from the media's finest minds:

Commercial banks may create digital currencies to rival Bitcoin, the virtual money whose U.S. dollar value collapsed by 46 percent in 24 hours last month, the head of New Zealand’s banking lobby said today.

Nothing FUD about it at all.

The smartest thing governments can do to fight Bitcoin is create alternatives like mintchip that have low or no transaction fees, offer merchants chargeback fraud protection with irreversible payments, but are denominated in a currency consumers already have. Getting money in and out of those alternatives can be made much easier than Bitcoin ever will be, yet they can build in secret or not so secret forms of transaction tracking to control anonymity, or just leave the payment systems anonymous at first and crack down later.

Bitcoin has nothing special to offer as a payment platform other than freedom from regulation.

[edd]

Gossip and FUD from the media's finest minds:

Commercial banks may create digital currencies to rival Bitcoin, the virtual money whose U.S. dollar value collapsed by 46 percent in 24 hours last month, the head of New Zealand’s banking lobby said today.

Nothing FUD about it at all.

Did you read the article?

The currency still faces problems around legitimacy, Hope said. “They are being used to buy things like arms and drugs,” he said. “I suspect tax isn’t being paid on Bitcoin transactions.”

Sounds like FUD to me.

Bitcoin has nothing special to offer as a payment platform other than freedom from regulation.

So just because a financial institution could create their own version of bitcoin, it's "nothing special"? Does that apply to all open source projects? After all, anyone could examine the code and distribute their own.

Just because a bank could make their own alt coin doesn't mean it would fare any better than any of the existing alts out there now. In fact, I think the only thing that makes any of the alt coins successful at all is the chance to become an early adopter and mine them while it's profitable. I doubt a bank's coin would offer that.

[TTBit]

The whole point of bitcoin is that no regulated entity can touch it. A currency created by the most regulated industry on the planet offers nothing more than what we have now.

[proudhon]

Newsflash, also, anyone may create a bitcoin rival.

[WiW]

Someone refer them to http://www.cryptocoincharts.info/. Maybe they'll do a little better than IxCoin.

[marcus_of_augustus]

I watched the whole interview and panel "discussion" ... the banker guy was pretty much ill-informed about how bitcoin works so not sure why they had him as the bitcoin go-to guy. The panel were all dyed-in-the-wool statists and spent most of the time saying how bad bitcoin is for anybody who even thinks about touching it ... no balance at all and lots of FUD.

NZ will be a bitcoin backwater for quite some time going by the dunder-heads on this show if they represent leading light NZ thinkers qualified to talk on television about world affairs ....

[noedaRDH]

I watched the whole interview and panel "discussion" ... the banker guy was pretty much ill-informed about how bitcoin works so not sure why they had him as the bitcoin go-to guy. The panel were all dyed-in-the-wool statists and spent most of the time saying how bad bitcoin is for anybody who even thinks about touching it ... no balance at all and lots of FUD.

NZ will be a bitcoin backwater for quite some time going by the dunder-heads on this show if they represent leading light NZ thinkers qualified to talk on television about world affairs ....

NZ is not intellectual "ready" for Bitcoins (in its current form)... which is probably the case with many countries. Bankers are good with numbers, but not necessarily with computers. So I agree that NZ is going to be behind the game should Bitcoin gain massive traction.

[ronfinberg]

I think at issue on the banker's side isn't his opinion on bitcoins as much as alternate methods of cheap cross border money transfers.  Can't say I know much about NZ, but Australia has been a leader in low cost FX transfers with such companies as OzForex and Technocash (their target audience are small to medium export/import businesses transferring funds between subsidiaries, vendors, and suppliers).  As NZ has a commodity and tourist based economy, I can only assume they have similar needs to Australia.  Therefore, if a banker from that area is talking bitcoins, it more than just digital currencies, but part of a strategy to maintain their market share on cross-border payments. 

Theoretically, for a bank driven product, something like XRB which is credit based would make the most sense.  A bank could help a firm issue XRB that is backed by their earnings with the currency being tradable between suppliers and buyers and transferable at the issuing bank.  On this point is why a NZ bank, or any other one for that matter would be interested in a digital currency as they could offer reduced rates to the debt issuer, while still controlling the entire loop of commerce.  So, it would be centralized, but via the financial health of the bank or company selling debt.  its actually not much different from the debt offerings used in the shipping industry during the 1500's or so. 

I'll make a prediction here, if a few banks can pull something like this off, IE a digital based debt offering, we'll quickly see the Goldman's of the world jump in, and ultimately create another financial crisis like in 2008 where everybody was borrowing against each other and when a few companies failed, the house of cards fell down.  (Gary V likes to say 'marketers screw up everything', can probably interchange 'bankers' with marketers) But, we are definitely still many years before seeing something like this take place

[solex]

I watched the whole interview and panel "discussion" ... the banker guy was pretty much ill-informed about how bitcoin works so not sure why they had him as the bitcoin go-to guy. The panel were all dyed-in-the-wool statists and spent most of the time saying how bad bitcoin is for anybody who even thinks about touching it ... no balance at all and lots of FUD.

NZ will be a bitcoin backwater for quite some time going by the dunder-heads on this show if they represent leading light NZ thinkers qualified to talk on television about world affairs ....

NZ is not intellectual "ready" for Bitcoins (in its current form)... which is probably the case with many countries. Bankers are good with numbers, but not necessarily with computers. So I agree that NZ is going to be behind the game should Bitcoin gain massive traction.

Several major NZ banks are Australian owned anyway.
These countries have strong currencies and low government debt. It may be that the public in strong currency countries will not automatically see Bitcoin as a safe-haven as quickly as people in places like Cyprus and Argentina.

[cypherdoc]

The whole point of bitcoin is that no regulated entity can touch it. A currency created by the most regulated industry on the planet offers nothing more than what we have now.

in fact, what it will offer is less.

[superduh]

let the dinosaurs speak. they only sense a meteor when it's 2 seconds away from hitting them