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Jose Fernandez da Ponte, Senior Vice President of Blockchain, Crypto, and Digital Currencies at PayPal, said blockchain technology will not fully replace traditional banking systems but will improve them by increasing efficiency and reducing costs.
Speaking with Roundtable expert Scott Melker, Fernandez da Ponte explained that blockchain is a powerful tool but not a complete replacement for existing financial infrastructure.
“I don't think so. I think that the blockchains are relatively transversal technology, but they are not for all purposes,” he said when asked if blockchain could replace PayPal’s current systems.
Instead, he compared blockchain to a co-processor in a computer, handling specific tasks that it does well while still relying on traditional systems for broader functions.
“There are parts of the workflow that blockchains do really, really, really well,” he said, noting decentralization and censorship resistance as key advantages.
While blockchain can improve financial transactions by making them faster and cheaper, Fernandez da Ponte believes most people will still prefer using traditional currencies for day-to-day transactions.
“Still, most folks will want to go back to fiat in some ways,” he said.
Rather than replacing banks and payment systems, Fernandez da Ponte sees blockchain coexisting with traditional financial rails.
“This technology will also make them better and will take part of the flow from them and will increase that velocity and reduce the cost, but it's going to be a coexistence between traditional rails and blockchains.”
Fed Chair Jerome Powell says Banks can serve crypto customers
This comes amid optimism for friendlier crypto regulations in the US under Donald Trump’s administration.
Earlier today, Fed Chair Jerome Powell confirmed that banks can still work with crypto customers — if they manage the risks properly.
On Jan. 30, during a press conference, Powell addressed concerns raised in the Financial Stability Oversight Council’s annual report, which flagged cryptocurrency as a potential financial risk.
“Banks are perfectly able to serve crypto customers, as long as they understand and can manage the risks, and it’s safe and sound,” Powell said. “The threshold has been a little higher for banks engaging in crypto activities, and that’s because they’re so new.”