Deutsche Bank: paper money will disappear in 10 years
Material posted: Publication date: 21-01-2016
According to the CEO of Deutsche Bank John Krayan, development of digital technologies will soon lead to disappearance of paper money from a turn.

Within the debatable panel 'The Transformation of Finance' organized by the Davos forum, the head of the largest private bank of Germany declared that cash in paper form, most likely, will give way further to digital currency.

The head of Deutsche Bank, in particular, noted that cash "needs to be dematerializovat". In his opinion, it will be easier for authorities to trace digital money, and ", in principle, it would be better if we could trace everything".

Thereby the main pluses in development of digital money, according to Krayan, are: higher efficiency of transactions, the increased security (actually a binding of a certain money to a certain person) and possibility of control of their movement.

In discussion about the future of money and financial sector, besides the head of Deutsche Bank, other representatives of the western financial elite also took part: CEO of Morgan Stanley James Gorman, CEO of PayPal Dan Shulman, chairman of the board of directors of Zurich Insurance Group Tom de Svaan and managing director of the IMF Christine Lagarde.

"The companies of financial sector anyway should adapt for changes. It is worth recognizing that there is a certain risk of that in the traditional sphere of banking services we can lose the situation as link in the course of implementation of payments or we will become simply not necessary, because of that that weren't in time behind development of payment technologies. To a certain degree we remain under protection of the legislation and regulatory norms, for example in respect of clearing implementation so far. The PayPal company, for example, can carry out transactions with quite large sums, but eventually clearing, and in particular in US dollars, is quite rigidly controlled.

Also quite often payments are made from one bank to another. In this plan banks are still actual. If to look at broker business of many banks, we see that here already there were quite serious technological changes. We don't trade in paper money, we give electrons. Process of trade was дематериализован, and banks quite successfully coped with these changes.

Whether there will be in the future paper money... We spend a lot of time for studying of this question. I believe that in 10 years cash in paper form will leave the address. For paper money there will be no need. They are inefficient and very dear.

In this plan, it seems to me, the Blockchain technology is quite interesting. Technology, but not Bitcoin as currency. I think, this technology in the future could be used for digital identification. Its realization on a global scale will require consent of the countries of G20. It, most likely, will be something like the supranational project.

In general, if we look at money, them use as a means of exchanging. But we also exchange also other things which aren't money, including it concerns Bitcoin. It is simple one more means for barter. We see that the bitcoin is often used in the illegal purposes, still the bitcoin wasn't widely adopted. As currency it is also a little difficult in use, and people will be pushed away by similar complexity. Money is also used as a store of value. But quotations of a bitcoin are very volatile, it not really reliable and not really liquid. There is only a limited quantity of bitcoins, and they need to be divided into small parts to use them.

I will repeat, we think over a question of the future of cash much. I consider that they have to be dematerializovana. In my opinion, the existing technology allows to make it. I think, the authorities will also be interested in it. The saying "The best friend of counterfeiters is a banknote in 500 euros" exists not just like that. It is quite large sum of money which can be forged, and eventually paper money is an anonymous money. I consider that, in principle, it would be better if we could trace everything.

One of problems is here that many people are captured by technologies in itself. We have to argue from the practical point of view. We don't plan to develop technology of new money independently, similar things are quite difficult. However we work on this direction with other companies. And we look for convenient ways of use of new technologies. I am sure that the technologies similar to Blockchain can find applications besides use of a bitcoin. It is that is actually protected unique identifiers and we can find for them application further".


Tags: financial center , finances