Time horizons are a funny thing.
Bill Gates once famously said, “Most people overestimate what they can do in one year and underestimate what they can do in ten years.” This is especially true in banking over the last two decades. With all the recent talk about blockchain technology, digital assets, and Web3, “progress” is a matter of perspective. Bankers will remember that it was only as recently as October 28, 2003, when Check Act 21 was signed into law authorizing banks to truncate original paper checks and process the check’s information electronically. In the two decades since, regulators have moved on to contemplating digitally native payment instruments created on distribute ledger technology that is akin to a digital cashier’s check.
Is that progress? Sure.
But can we do more? Definitely.
It’s pretty clear that within our lifetimes there will be a Central Bank Digital Currency (CBDC), we will all have frictionless and cheap payments, and banking products will become more important than Banks themselves. On one hand, the future cannot come fast enough. On the other, the progress over the last two decades and the speed at which financial innovation is accelerating can leave all of us feeling like we are seeing history unfold at a break-neck pace. If Bill Gates learned one thing from bringing about the Personal Computing revolution, it’s that timing is everything. And that time horizons are a matter of perspective. Whether you believe we are rushing ahead too quickly, or that we aren’t going quickly enough, it is an incredibly fascinating time to be working in financial services.
While the journey from checks to digital assets is a good example of how far digital financial services have come, it also demonstrates a critical point. Financial services have evolved over the past two decades in closed networks where a single entity owns (or licenses) and controls the infrastructure that powers financial services (Web 2.0). Web 3 proponents tell us that the next evolution of financial services will evolve in open networks where no single entity owns or controls the foundational blockchain infrastructure that will assist in powering financial services. That Banking services will become portable and interoperable across digital ecosystems and render many of today’s financial intermediaries superfluous.
What would that mean for us as consumers?
Do I have a bank account or a blockchain address?
Is it safe and simple enough to use?
Do I trust a Bank or a protocol?
Who do I call if I have a problem?
More importantly, who is working on these problems?
Many of us at GenuBank find ourselves coming back to these questions. We know that on the other side of these questions lies incredible innovation that can power a more inclusive financial ecosystem. A system that can provide equitable access to safe and affordable financial services by affirming the critical need for safe, affordable, and accessible financial services.
While we may not have the answers (yet), we are committed to contributing to the future of money and payment systems, to play a role in economic growth, financial growth and inclusion, national security, and be a small part of the technological innovation that will carry us into the future. This isn’t the end of banking as Web 2.0 defined it; it is the start of something different. Something better. And whether your time horizon is one year or ten years, the future belongs to those people willing to seek out answers. We’re excited to be seeking, and we hope you’ll join us for the ride.