Banks Are In The Depression Stage Of Grief

We’ve finally said goodbye to 2018. Now is a great time for the crypto industry to get reacquainted with one of its core missions…

Replacing banks.

Big banks have been in the crosshairs of crypto believers and entrepreneurs since Satoshi Nakamoto issued his white paper that launched bitcoin a decade ago. And not one bank has been replaced with a crypto rival.

Did Nakamoto overestimate the power of cryptocurrency or underestimate the (staying) power of the banks? Or was his vision just plain wrong?

You can bet that if I’m asking these questions, so are banks.

Their reactions to crypto have been all over the place. I thought there was no pattern until I thought of the five stages of grief.

  1. Denial
  2. Anger
  3. Bargaining
  4. Depression
  5. Acceptance

It makes sense. The banks are facing a possible existential threat.

Their first reaction naturally would be denial. It would explain Jamie Dimon’s statements… from “Bitcoin is a fraud” to “If you’re stupid enough to buy it, you’ll pay the price for it one day.” Dimon, the CEO of JPMorgan Chase, is just one of many bank CEOs who have dismissed bitcoin.

Next comes anger. Late last year, Dimon said, “I don’t really give a s*** about bitcoin – that’s the point, okay?” And the usually calm and wise Warren Buffett, a big investor in Bank of America and Wells Fargo, said last year that bitcoin was “probably rat poison squared". That’s neither clever nor insightful. That accusation was made in anger.

Then there’s bargaining. For legacy banks, this takes the form of exploring blockchain technology. Most banks have entered into consortiums (R3, Enterprise Ethereum Alliance, etc.), building permissioned blockchains to store, record and process financial transactions faster and more cheaply.

The fourth stage is depression, or in this case, a begrudging resignation that blockchain and fintech companies aren’t going away. That’s the stage banks are in right now.

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