Deutsche Bank on Blockchain shifting businesses
According to Deutsche Bank's chief investment officer and global head of wealth, Christian Nolting, Blockchain technology could represent a major shift in how companies conduct their business.
In a slide presentation, Christian Nolting and Marcus Muller, global head of the CIO office, explained how digital currencies and blockchains work and predicted their future trajectories.
The presentation stipulated that the “opportunities associated with blockchain technologies are huge,” and could be fully put into practice within the next few years.
The bankers predictions estimated that 10% of the global gross domestic product (GDP) would be tracked or "regulated" by a blockchain by 2027.
The presentation stated: “We expect that the blockchain will change the business model of companies in a sustained way. The blockchain technology enables a faster and cheaper exchange of assets and financial products between individuals without an [intermediary], which reduces the asymmetry of information between the individuals.”
The bank is classifying digital currencies as "highly speculative" due to their lack of intrinsic value and backing from a central bank. Cryptocurrencies need more regulation and security to become a proper asset class, even though they could represent an alternative to fiat currencies, especially in nations with runaway inflation.
Digital currencies in general could evolve in a number of possible ways, with Some of the main factors affecting the growth of digital currencies include government intervention and competition between different currencies. The potential for hard forks creating new currencies is also a potential cause for concern, since it could lead to inflation, the presentation stated.
The presentation said "In addition, central banks could develop their own cryptocurrencies and replace the private ones in the market”.