In an interview with CNBC, UBS CEO Sergio Ermotti has said that blockchain technology is ‘almost a must’. This is despite his critical stance on cryptocurrencies, which goes back to October last year, when he said ‘The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption’.
Indeed, UBS are already actively involved in blockchain technology. They have joined with the Bank of Montreal (BMO), CaixaBank, Commerzbank, Erste Group and IBM – whose blockchain is the one being used – to develop a global trade finance platform called Batavia. According to IBM:
The consortium aims to support the creation of multi-party, cross-border trading networks by establishing Batavia as an open ecosystem that can be accessed by organizations big and small around the world.
Effiency and Cost-Saving
As with a number of large companies and high-profile endorsers, blockchain is seen as a way to increase efficiency in data management and security, as well as presenting clear ethical opportunities. Ermotti said:
Our industry will continue to be under pressure, in terms of gross margins. It’s no doubt. The only way you can stay relevant is not only by being strong in terms of capital, in terms of products, the quality of the people you have, advice you give to clients. You need also to be able to price it correctly.
Ermotti and, by extension, UBS, have joined the ranks of those who are drawing a clear line between crypto and the underlying blockchain technology. A growing consensus seems to be that crypto doesn’t have the potential or the future that blockchain has, and this could spell trouble in the future for cryptocurrencies.
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