Bitcoin news and analysis keeps on coming. In the last few days we have seen:

• NCR will bring bitcoin payments to the high street by integrating support for the crypto-currency via its Silver iPOD point-of-sale device for small business owners
• a dutch crypto-currency fanatic has implanted two NFC tags under the skin in his hands to store his digital cash
• BNP Paribas analyst Johann Palychata has published an article arguing that ultimately the more revolutionary impact of crypto-currencies could be as a technological tool for the financial world. He outlined five way it could shake up finance and asset servicing.

The BNP Paribas analysis reveals the full potential impact of crypto-currencies. 

The development of an alternative to the current banking system

Palychata writes, “Crypto-currency technologies are still far from being widely used, but the development of an alternative to the current banking system is under way: thousands of entrepreneurs and finance professionals have now joined the initial group of enthusiasts and core developers, and venture capitalists have committed over USD 250 million to startups in the crypto-currency space over the last two years.”

He outlined five areas where crypto-currencies could have an impact:

1. means of payment: BNP Paribas anticipates “slow emergence of an ecosystem to accommodate a broader use of crypto-currencies in the real economy” 
2. payment system between large corporates: “Bitcoin has settlement batches roughly every ten minutes and operates continuously day and night. Transactions are irrevocable and cheap. Nonetheless, the unit of account is comparable to central bank money in its nature. Large corporations might decide to use the Bitcoin network rather than existing settlement systems.”
3. decentralisd infrastructure for securities issuance and servicing: this could happen because “Bitcoin is a comprehensive decentralised registry, settlement and messaging system that is currently used to host a currency”, but the technology could also be used for securities
4. world-wide network for fund distribution: Palychata argues that, “Bitcoin is a worldwide network any individual can join, any time, anywhere. It would therefore be the largest fund distribution platform a fund management company could dream of. The potential reduction of the platform costs (fewer intermediaries and a shorter route to investors) and the increased speed of the investment process (in the crypto-currency world, the cash collected at the time of the subscription is simultaneously settled and available for investment) could further enhance the competitive advantage of funds using this technology.”
5. use of the protocol scripting features for international trades: the reasoning here is compelling, “International trading relies on trade finance to secure payments. Bitcoin transactions can be designed to mimic the characteristics of a letter of credit and bypass the banks that currently act as intermediaries. The scripting capabilities of Bitcoin allow complex transactions to be set up between two commercial partners.”

For full article - recommended -  see here.

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CTMfile take: New Bitcoin accepting POS terminals and a crypto-currency fanatic embedding Bitcoin NFC chips under his skin are a side show, but Palychata’s paper is not. Here is a global network bank publishing a discussion paper that Bitcoin has the potential to completely change the global banking system. BNP Paribas wouldn’t have done that if they didn’t think that there was value in the analysis. The words “Bitcoin is a comprehensive decentralised registry, settlement and messaging system that is currently used to host a currency” should strike fear into all the providers of the current financing and asset servicing. They also show the need for corporate treasurers and their associations to work out how they are going to manage the threats and opportunities from the emergence of crypto-currencies. The only certaintly is that they are not going away, and will start to change the very basics of how we do business. Johann Palychata and BNP Paribas are to be congratulated on this paper.