Stellar Founder Jed McCaleb: “Most Financial Institutions are not Going to use Bitcoin”

Stellar Founder Jed McCaleb: “Most Financial Institutions are not Going to use Bitcoin”

In a recent interview, Jed McCaleb discussed his thoughts on the future of financial institutions which he holds will be absent of Bitcoin. One reason could be Stellar’s potential to function as a security token platform, since security tokens are already being integrated into the capital markets industry.

Jed McCaleb on the Integration of Finance and Bitcoin

Jed McCaleb has been involved in the blockchain space since 2009. You may know him as the co-founder of bitcoin exchange Mt. Gox, blockchain-for-banks startup Ripple, and payment platform Stellar, where he currently serves as Chief Technology Officer.

It’s no secret that cryptocurrencies suffered a harsh year throughout 2018. Bitcoin fell 74%, Ether dropped 84%, and even Ripple’s associated cryptocurrency XRP tumbled 84%.

McCaleb isn’t worried though. He’s of the position that blockchain technology is still in its infancy— and has a bright future of application ahead.

Recently, Stellar’s commercial arm Lightyear acquired blockchain startup Chain, which has partnered with financial institutions such as Visa, NASDAQ, Citigroup, Capital One, and others.

McCaleb was interviewed by Yahoo Finance where he discussed recent details on the acquisition, as well as Stellar’s future plans.

Perhaps the most notable words which came from McCaleb’s interview centered around his view on the integration of financial institutions and Bitcoin:

“I think it’s true that most financial institutions are not going to use bitcoin. But in my mind, what blockchain gives you is a public record that everyone can see, but they can’t change it. So parties can transact even if they don’t know each other.”

How Stellar Can be Used as a Securities Token Platform

Of course, McCaleb’s relationship with Stellar might influence his view on the future of Bitcoin and the capital markets industry. Yet many other individuals have made positive remarks concerning the future integration of Stellar and finance.

Chain’s CEO, Adam Ludwin, has described Stellar as a platform which allows institutions “to issue and transfer assets on an open medium over the internet”.

Smartlands advisor Viktor Krekotin has made an interesting case for Stellar as a prime fit for security token issuance— especially when compared to Ethereum.

As the security token industry continues to develop and integrate with Fintech, this could be part of McCaleb’s reasoning as to why Bitcoin will not be utilized by ‘most financial institutions’.

Stellar’s capability for asset issuance has the potential to provide much more than Bitcoin, while still offering the transparency of an open-source public blockchain.

Security tokens are already seeing implementation— equity, investment funds, real estate, and even ownership of a Picasso painting have become tokenized. Industry leaders have said even professional sports teams have expressed interest in tokenizing ownership.

It is clear then that the integration of blockchain technology with financial institutions involves much more than immutable records of decentralized financial transactions. The tokenization of traditional financial securities is already underway, which certainly suggests that security tokens may bridge the gap between financial institutions and blockchain technology.

What do you think about Jed McCaleb’s comments on the future of financial institutions as functioning without Bitcoin? Do you agree with such a statement? Let us know what you think in the comments below.

Image courtesy of Uniton.

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