SIBOS COIN

We have arrived at my favorite time of year, which is Sibos season. For me, Sibos is my Superbowl, the highlight of my year and a spectacular event that I have been privileged to attend 17 times out of the last 20 years. My expectations for Sibos 2018 are the highest since before the recession of a decade ago.

Gone are the days when the social aspects of Sibos were great for building long-term relationships. Now it is all business at Sibos - which reduces the human connection.

My expectations are so much higher this year due to real improvement in the way which banks and financial institutions focus on innovation. Banks have traditionally wanted the latest and greatest products and technology. They want to be the SECOND adopter – seeing far, far too much risk in being the first adopter!

Now, however, visible and actual innovation projects are being developed, invested in and put into action in a way I have never seen in my career.

Global trade has been my life passion. The offerings from companies like Wave, EximChain, Finastra, Trulioo, Juntos as well as payment eWallets WinstantPay and Paybase. The progress of R2 and Ripple along with SWIFT developed initiatives are bringing a whole new world that benefits so many.

The advancement of Open Banking and the potential of Blockchain brings an increased sense of excitement for Sibos 2018. Blockchain has dominated the conversation for the last couple of years and it should, just based on raw potential. Blockchain is not a solution for everything. It is the securest and safest data store available today. Blockchain still lacks the speed and scalability to impact transactional banking in a meaningful way. That too will change in time.

What excites me most is the benefits that global trade can reap from cryptocurrency. The potential for secure cross-border payments based on an immutable audit trail can dramatically reduce costs and fees while providing transparency and privacy. This will be an industry game changer. This cryptocurrency does not yet EXIST!

Reality Check…

I am sorry for the faithful supporters of Bitcoin and about 1,000 other crypto-coins that are currently available. I am forced to point out that most people have lost money on these purely speculative investments.

Nevertheless, I do believe that there is a place in the market for cryptocurrencies as an investment asset class. It is clear to me that we will see more structure and regulation to define and protect those who are interested in this new asset class.

This is Next!

Governments will produce and introduce their own cryptocurrencies, which will be a virtual representation of the physical fiat money we all use today. The reason that governments will do this will be cost savings. The reduction in cost of printing and moving of physical money will be huge. There will also be a huge reduction in the cost of fighting crime.

Physical currency is a criminal’s best friend.

Reducing the use of physical currency will curb the ability of criminals to financially benefit from their illegal activities. This will cut the efforts required to fight a range of crime from money-laundering, drug dealing, human trafficking, racketeering and many crimes in-between.

However, government-backed cryptocurrencies will still be disjointed in value and availability. They will still be subject to political manipulation and irresponsible spending by politicians. This will not provide a clear benefit for global trade.

The Solution:

What must happen, in my view, is the creation of a global cryptocurrency to facilitate global trade. It must be freely floating. It must not be pegged to a volatile commodity, like the Petro to oil or the gold-backed cryptocurrencies to the yellow metal. Its value should be determined in a way that is totally independent of the agenda of one particular government. Currently, 80% of global trade is based in US dollars which is far too much.

This global cryptocurrency must be tied to a consistent and independent valuation such as the IMF’s basket of currencies. This would determine the price daily. This global cryptocurrency needs to be under independent control through the G20, or one of several global organizations such as the United Nations, the World Bank, the ICC, etc. Once a cryptocurrency is in place with a solid but independent valuation and under the guidance of a strong organization that is not dominated by any one government, it will encourage global trade to BOOM!

This will provide a new definition to free trade and to a world without trade borders. This will allow the economic growth to be more evenly distributed. This should facilitate the movement of the unbanked into their local and global economies. Despite the rhetoric of banks and credit card providers, the unbanked do not need them. The unbanked should not be positioned as the new revenue stream for bloodsuckers.

What the unbanked need is simple - an inexpensive way to pay and get paid - and that’s it!

The future is bright! Technology will continue to lead us to have better and more productive lives. Technology is the road out of poverty and has already been the recent stimulator for millions to improve their lives. This is evidenced by the huge growth of the global middle class. This trend can only accelerate once a global trade cryptocurrency is perfected and made broadly available. Such a cryptocurrency needs to be managed by an organization that is independent, strong and efficient! SWIFT is unquestionably a possible answer!

We could call the new global trade cryptocurrency; SIBOS COIN…