Last updated on May 15th, 2014 at 02:15 pm
It’s not very often that major financial institutions highlight the benefits of peer-to-peer decentralized digital currencies, especially banks that are some of the biggest in the world today. Well, over in the United Arab Emirates (UAE), banks are enthusiastic about the technology behind bitcoins.
Banks in the UAE are in the middle of upgrading their technologies amid pressure from retail client competition and the growing popularity of virtual currencies akin to bitcoin. Although there haven’t been any official press statements thus far, Farhad Irani, the head of retail banking at Mashreq bank, said significant technology rollouts could be introduced within the next three to five years.
Irani explained that the cryptocurrency market is a growing industry and the banking and payments markets could be on the verge of improving consumer solutions and amazing the customers.
However, one banking official told a media outlet that he is optimistic regarding digital currencies. He stated that financial institutions would rather have their customers perform simple activities online, such as requesting a bank statement or changing an address, which would free up resources and staff members.
“Cash has been the traditional mode of payment in UAE due to its safe and secure environment but as the economy grows, the cost of cash to society is also increasing,” Kaizar Patla, head of Consumer Assets at Abu Dhabi Commercial Bank, in an interview with The National. “To that effect, the Government of the UAE is investing heavily in adoption and implementation of electronic payments through the e-government initiative. This will further boost the economy and enhance financial inclusion.”
Patla further stated that when it comes to money, trust is the most important issue. Despite the drawbacks of virtual currencies – volatility, security breaches and government restrictions – banks are still attempting to learn from them.
“The traditional mode of payment by card offers works and is reliable and safer. There are also many systems around it to protect the consumer. Therefore, while banks can learn a lot from new digital currencies, it might take some time for new digital currencies to become viable solutions on their own.”
This isn’t the first time that a banking official or a company executive has listed the benefits of bitcoins and other cryptocurrencies.
EBay CEO John Donahoe recently said that digital currency has become an exciting and emerging technology – most technology enthusiasts regularly highlight the bitcoin technology rather than its currency capabilities.
“We think Bitcoin will play a very important role in the future. Exactly how that plays out, and how we can best take advantage of it and enable it with PayPal, that’s something we’re actively considering. It’s on our radar screen,” said Donahoe.
Last month, Minneapolis Federal Reserve Bank President Narayana Kocherlakota espoused in a speech during a town hall meeting at the North Dakota State University that he is definitely interested in the technology of bitcoin. However, he dismissed any notions that it would combat the U.S. dollar for currency supremacy.