The Quadchain Solutions Foundation team recently conducted a live virtual panel and discussion with students from the St. Louis College MBA Program (Philippines). The panel gave a talk on the relevance of blockchain and cryptocurrency in the current financial system landscape, and how it can bring transformation in terms of efficiency, transparency and trusted solutions. Moderated by Quadchain’s Vince Vicente (Vice President), the panel also included Bimbo Heraldo (President) who discussed the current blockchain space in the Philippines, Edgar Tuliao (CFO) who discussed the theory of monetary policy and the economics of the cryptocurrency space and Vincent Tabora (CTO) who gave an explanation on the theory and application of cryptocurrency.
The team wants to build a better understanding between the Philippine business and financial community, through a series of educational talks that focus on the key aspects of cryptocurrency and blockchain technology. There is plenty of misinformation and misunderstanding that needs to be cleared. A classic example is that Bitcoin is a scam that defrauds investors of their money or that cryptocurrency is primarily used for illegal criminal activities. Yet when you question the evidence the whole argument falls apart. The fact is no one can provide definitive evidence with the number on just how much of cryptocurrency is illegal and that Bitcoin is a scam, despite being around since 2009. We don’t deny that cryptocurrency can be used for financial crimes, but it is more likely to be committed using the current financial system since it is more well known.
As we move forward, the financial landscape is changing. The new innovations in fintech are geared more toward blockchain-based solutions that bring more transparency and efficiency to the current financial system. Legacy systems like Swift are proving no match to cross border payment settlements compared to cryptocurrency like XRP, while Bitcoin is proving to be a digital asset class that can be a store of value. It will be hard for banks to accept these new technologies since it competes with their own systems, but they can adopt some of these for their own good. An example is JP Morgan Chase developing their own private blockchain for cross border payment settlements. Other companies like Facebook also want to provide blockchain-based payment processing solutions using a token that can be exchanged through their platform for easier direct payments between users.
While banks may be the last to accept cryptocurrency, other financial institutions are already beginning to embrace cryptocurrency and the blockchain. These include investment firms, who are accumulating cryptocurrency like BTC and ETH for custodial holdings to customers. There have been talks of increasing the exposure among more institutional investors by the issuance of ETF, but regulations are still something cryptocurrency will have to deal with. Regulators will scrutinize cryptocurrency in order to prevent money laundering and even the devaluation of fiat currency. How this all turns out will depend on how much regulators can control cryptocurrency, but it is a decentralized system. Bitcoin has no central authority that controls the network and it does not have any structured business organization since it is not a company. Bitcoin is really just computer code that runs on a network of computers.
From a financial viewpoint, blockchain-based solutions can also help with auditing and accountability of assets. The world is more interconnected than before, and this gives businesses more opportunities. The problem is how you can build trust with your business partners and others involved. The blockchain can help applications provide a layer of verification and security that is much needed in today’s systems. At Quadchain Solutions Foundation, we look forward to working with all avenues to deliver solutions using the blockchain. Whether it involves cryptocurrency or not, the point is in building a system that is more transparent and trustworthy. Systems that can prove the authenticity in supply chains, fraudulence in funding sources and other problems that affect business transactions.
(Special thanks to Kate Tayaban-Bada PhD and St. Louis University for hosting our panel)