Blockchain Technology Could Save the World from Another Global Economic Crisis Says Former JPMorgan Big Shot
While many see nothing good in bitcoin and other cryptocurrencies, many others believe distributed ledger technology (DLT) will revolutionize the world. Pang Huadong, the former vice president of the North American investment banking division at JPMorgan, is one of those people. Huadong, on July 22, 2018, said that blockchain technology might save the world from plunging into another financial crisis, due to its ability to reduce financial risks.
Blockchain Reduces Financial Risks
In an interview with China Economic Times, Huadong, the honorary academic advisor of the Asian Blockchain Institute, noted that even though blockchain technology has its unique challenges, it still has enormous potential to strengthen the traditional finance system by reducing financial risks, fostering transparency, and reducing the cost of trust. “The blockchain is essentially a technology that can be de-mediated or weakly intermediated,” he said and added, “Therefore, blockchain technology can build trust mechanisms at the lowest cost.”
According to Huadong, his days at JPMorgan’s Fixed Income Self-Management Department during the 2008 financial crisis opened his eyes to quite many capabilities of DLT. Huadong mentioned that the firm had more than $40 billion in assets at the time, with an average daily loss of $300 million. This experience made him understand that blockchain technology may be the key to preventing another global economic meltdown.
“Limitless” Potential for the Future of DLT
Huadong, a graduate of the Massachusetts Institute of Technology (MIT), concludes that the burgeoning technology has a lot to offer to the world and that it’s only a matter of time before blockchain technology achieves its full potential.
“Now the development stage of domestic blockchain technology is at a very early stage. Although it has experienced some relatively large fluctuations, the development prospects are limitless,” Huadong concluded.
While Huadong remains optimistic that blockchain technology is precisely the pill traditional finance systems need to stay healthy, some other heavyweight finance institutions think otherwise. Back in June, the Bank of International Settlement (BIS), which is the bank of central banks, released a report arguing that the blockchain can’t perform on the same level with legacy databases, concluding that the DLT could crash the entire internet if it tries to process the volume of retail payments handled by centralized institutions.
Similarly, BTCManager reported in June 2018, that the chief technical officer of Israel’s Bank Hapoalim had stated that blockchain technology is merely in a hype cycle and is just not extraordinary.