<p>Generally, Bitcoin is a poor fit for the needs of most financial institutions. They want features which are incompatible with Bitcoin, or require unsupported workarounds:</p>

<ul>
<li>Holding local currencies.</li>
<li>Reversing transactions.</li>
<li>Keeping transaction information secret from the public, but available to regulators.</li>
<li>The ability to kick others off of their platform if they give the platform a bad name.</li>
</ul>

<p>What those articles talk about is Bitcoin technology (also called 'blockchain technology') which is much more broad.</p>

CC BY-SA 3.0
2016-10-30T15:19:22.403Z
that makes sense. Would there be a plausible use of blockchain for financial institutions, then? The drawbacks of transparent transaction history are still valid.
Marie. P.
CC BY-SA 3.0
2016-10-30T22:45:16.323Z
@Marie.P. Yes. Although Bitcoin operates as a public blockchain, there's no reason why you couldn't have a private blockchain, and only allow other financial institutions to view the blockchain.
Nick ODell
CC BY-SA 3.0
2016-10-30T05:03:52.830Z
2016-10-30T05:03:52.830Z
Nick ODell
<p>After having read <a href="http://www.coindesk.com/commonwealth-bank-wells-fargo-test-blockchain-cotton-trade/" rel="nofollow">an article</a> on the use of blockchain currency, I am wondering if there may be more to it in the time to come in the areas of corporate finance and financial industry.</p>

<p>My thinking is that on the one hand, the hacks against bitcoin exchanges have created an uncertainty that established banks do not want to meddle with. Then again, they have to rethink their business models very strongly. </p>

<p>Furthermore, with the decentralized transaction confirmations in bitcoin, the settlement cost and duration is expected to increase, as it did recently, making it not a substitute for cash and credit cards.</p>

<p>On the other hand, a study from Oliver Wyman that I saw referenced often, but could not access myself, mentions that banks could hope to save $65-80bn per year in settlement cost when switching to new mechanisms, probably the main reason why they started <a href="http://www.nytimes.com/2015/08/31/business/dealbook/bitcoin-technology-piques-interest-on-wall-st.html" rel="nofollow">experimenting with bitcoin</a> in the first place.</p>

<p>However, it seems that bitcoin suffers from longer transaction verification times (and fees), which would have to be overcome before more widespread use. Just in the last week, the backlog has increased.</p>

<p>Do you think bitcoin has a future to be used by large financial organizations, and why?</p>

<finance>
Is there a plausible future for the use of Bitcoin in the financial industry and corporate finance?
Marie. P.
# Is there a plausible future for the use of Bitcoin in the financial industry and corporate finance?

(Asked by: username_0 on 2016-10-29)

After having read [an article](http://www.coindesk.com/commonwealth-bank-wells-fargo-test-blockchain-cotton-trade/) on the use of blockchain currency, I am wondering if there may be more to it in the time to come in the areas of corporate finance and financial industry.

My thinking is that on the one hand, the hacks against bitcoin exchanges have created an uncertainty that established banks do not want to meddle with. Then again, they have to rethink their business models very strongly.

Furthermore, with the decentralized transaction confirmations in bitcoin, the settlement cost and duration is expected to increase, as it did recently, making it not a substitute for cash and credit cards.

On the other hand, a study from Oliver Wyman that I saw referenced often, but could not access myself, mentions that banks could hope to save $65-80bn per year in settlement cost when switching to new mechanisms, probably the main reason why they started [experimenting with bitcoin](http://www.nytimes.com/2015/08/31/business/dealbook/bitcoin-technology-piques-interest-on-wall-st.html) in the first place.

However, it seems that bitcoin suffers from longer transaction verification times (and fees), which would have to be overcome before more widespread use. Just in the last week, the backlog has increased.

Do you think bitcoin has a future to be used by large financial organizations, and why?

**Tags:** finance


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## 1 answers

### Answer by username_1 on 2016-10-30. Score: 1 | Accepted answer

Generally, Bitcoin is a poor fit for the needs of most financial institutions. They want features which are incompatible with Bitcoin, or require unsupported workarounds:

* Holding local currencies.
* Reversing transactions.
* Keeping transaction information secret from the public, but available to regulators.
* The ability to kick others off of their platform if they give the platform a bad name.

What those articles talk about is Bitcoin technology (also called 'blockchain technology') which is much more broad.

> **Comments:**
> **username_0**: that makes sense. Would there be a plausible use of blockchain for financial institutions, then? The drawbacks of transparent transaction history are still valid.  
> **username_1**: @username_0P. Yes. Although Bitcoin operates as a public blockchain, there's no reason why you couldn't have a private blockchain, and only allow other financial institutions to view the blockchain.  

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