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Kapronasia Founder and Managing Director Zennon Kapron has been involved in the fintech industry for over fifteen years, and his consulting firm helps financial institutions and other companies understand new innovations in financial technology, such as Bitcoin, and the opportunities those technologies may provide in China and the rest of Asia. Kapron is also the author of Bitcoin in China – Chomping at the Bit, and he’ll be sharing his thoughts on how fintech is changing the way the world banks at the upcoming Inside Bitcoins Conference in Seoul. The fintech specialist recently shared some of his thoughts on Bitcoin in China and blockchain technology as a whole with Inside Bitcoins.
Also Read: Is China Turning To Bitcoin As Yuan Devalues?
Status of Bitcoin in China
With the recent reports of a China-inspired rise in the bitcoin price, it made sense to get Zennon Kapron’s thoughts on Bitcoin usage in China. Kapron sees challenges for Bitcoin adoption in China, and he doesn’t view it as much different from the problems facing other countries around the world. When it comes to Bitcoin usage in specific countries, Kapron contends that there are usually certain questions that need to be asked:
“The use of bitcoin in China is still very limited. The basic challenges are similar to what you would see in any other market: What is the problem that it solves? Is accepting or using bitcoin easier that a credit card, cash or other form of payment?”
The ability to avoid capital controls is often touted as the reasoning behind China’s interest in Bitcoin, but Kapron noted that there are still cheaper options available to Chinese residents who want to move money out of the country:
“Certainly avoiding capital controls is one potential use for bitcoin, but there are many more cheaper legal and illegal ways for individuals to move their money out of China, so we still believe that the people using bitcoin to move money out of China are still relatively limited.”
Will Banks Be Nothing More Than Consultants?
Veritaseum CEO Reggie Middleton recently made the point that banks may not serve much of a purpose outside of offering advice in the future due to all of the new innovations in fintech. When asked about the idea of banks acting as consultants in the future, Kapron did not seem entirely bullish on the concept:
“I actually think the opposite – at least in terms of their future function. Fintech is all about unbundling products and services. Customers increasingly have a choice of provider for anything from international payments to wealth management. Banks have the capital base to be able to enable some of these products, but increasingly the advice that individuals or firms are looking for is coming from external parties, not the banks themselves. Whilst banks may provide some advice as a consultant on which products to use, many of the value propositions behind these products are self-directed investment and financial solutions, removing the need for a traditional advisor.”
How Can Banks Benefit from Blockchain Tech?
Another Bitcoin-related topic that has been popular lately — at least in relation to the banking industry — has been the use of blockchain technology by financial institutions. While Kapron agrees that blockchain technology could be helpful for some banks, he thinks that the entire industry should think about what problems are solved by the blockchain before treating it like a solution to every problem in finance:
“In general, institutions need to be careful of adopting technology for technology’s sake. Blockchain or other distributed ledgers are elegant technology solutions, but we need to make sure that we really understand the problem. Banks are incredibly interested in blockchain as a technology to solve everything from internal operational reconciliation processes like settlement to external solutions like digital securities trading, but do those solve problems that exist for the bank today? The answer may be yes for some banks and no for others.”
Zennon Kapron will be sharing more of his thoughts on how Bitcoin and other fintech innovations can change the banking landscape at December’s Inside Bitcoins Conference in Seoul.
Featured image via Fuzzy Gerdes.
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.
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