This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here .
TransferWise CEO Taavet Hinrikus has pronounced Bitcoin dead.
Hinrikus, who runs the cross-border money transfer firm, made the remark during an interview last week to promote TransferWise’s Mexican debut. The CEO said that Bitcoin’s growing popularity was akin to a "gold rush," that "real people" are not using it, and it doesn’t even solve any problems in the first place.
The grain of salt to take with Hinrikus’ remarks is that Transferwise is in competition with several Bitcoin firms. Circle , which just obtained a U.K. operating license, facilitates money transfers by turning currency into Bitcoins and then converting them back into fiat currency after the transfer completes.
These Bitcoin transactions depend on the distributed computing power of the network’s users rather than a central body such as a clearinghouse, so they ultimately cost less because there is no middleman that needs to receive payment.
TransferWise was valued at $1 billion last year , at which time money transfer and fintech firms represented the second-largest share of fintech funding backed by venture capital in the U.K. at 19%, or $243 million.
Time will tell if Hinrikus is correct, but what is inarguable is that we’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.
No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new fintech revolution.The battle already underway will create surprising winners and stunned losers among some of the most powerful names in the financial world: The most contentious conflicts (and partnerships) will be between startups that are completely reengineering decades-old practices, traditional power players who […]
