As fat-finger errors go, it wasn’t that big a deal. But as an illustration of banks’ clandestine approach to Bitcoin, it was worth a million words.
In a week dominated by Bitcoin’s price surge, I was far more interested in an apparent mistake by DBS Bank. On Thursday, Singapore’s biggest commercial bank appeared to soft-launch trading services for a number of cryptocurrencies including (naturally) Bitcoin. But within a few minutes, the page had been taken down and, in response to a slew of media questions, a spokesperson for DBS admitted that the proposed exchange was still a “work in progress” and awaiting regulatory approval.
Whatever the reason for the premature publication of its crypto services, DBS committed one of the cardinal sins of banking: they showed their working.
More than any other kind of business, a bank’s biggest asset is its perception among the public. They want to be seen as swans, never appearing panicked or rushed; instead, poised and gliding over the choppy financial waters, hiding their furious paddling beneath the surface.
To maintain this swan-like grace, it’s crucial that banks ensure they have—forgive me—all their ducks in a row before they launch a new product or service. DBS Bank announced before they were ready, and to some extent that’s an embarrassment. But it’s unlikely to spook shareholders or customers much, since DBS merely announced what a swathe of other banks have either already done... or what they must be doing.
Readers will be well aware that several major retail and investment banks have recently launched new crypto services or have, like JPMorgan, performed a remarkable reverse ferret on the value of Bitcoin as an investment. But don’t take other banks’ silence as evidence that they’re not preparing their own Bitcoin services. The DBS debacle (if you can call it that) suggests that many banks are paddling as hard as they can towards Bitcoin but, for obvious reasons, prefer to keep their efforts hidden until all the technical and regulatory issues are fully ironed out.
And why wouldn’t they be preparing? Every week brings fresh news of a bank embracing Bitcoin. Last week the Swiss arm of Gazprombank (Russia’s third-largest by net assets) announced the launch of institutional Bitcoin services. The week before it was JPMorgan, which admitted that Bitcoin looks like beating gold as an alternative investment; before that it was PayPal. Next week—who knows?
But even if no one else breaks cover this year, you can bet your bottom bitcoin that banks are sweating hard on bringing new crypto services to market. Many will still be in the research phase; others may have done all the complex work and are just waiting for the most propitious moment to launch.
COVID-19 has been aptly called Bitcoin’s “black swan event,” a completely unforeseeable occurrence that has profound impact on currencies and financial markets. The story of 2020 has been one of economic paralysis, worldwide splurges of money printing, stock markets shuddering at each new bout of bad economic news and, yes, Bitcoin’s steady climb towards $14,000 and beyond.
As trust in fiat money declines and Bitcoin continues to outperform other investment assets, banks around the world are coming to the realization that the emergence of Bitcoin was the real banking black swan event. It’s inconceivable that some of the world’s biggest banks are not feverishly working out how to not be left in its wake. Don’t be fooled by banks’ stately, serene behaviour in the face of this new financial revolution: there’s a hell of a lot of movement just beneath the surface.
Here’s a tip: if you’re feeling a bit full of yourself and overly proud of your professional achievements, just remember that Mozart composed four piano concertos before he was 12. At the same age, Blaise Pascal worked out the interior angles of a triangle. And in 1990, a 12-year-old Sergey Karjakin became the youngest-ever chess Grandmaster.
If that’s left you feeling a little deflated, don’t worry. Prodigies are rare for a reason. And this makes it all the more important to recognize genius when we see it.
Last Friday, another prodigy turned 12. It was on Halloween 2008, during the nightmare on Wall Street known as the Great Recession, that an unknown author calling themself Satoshi Nakamoto published Bitcoin: A Peer-to-Peer Electronic Cash System. Since then, Bitcoin has weathered everything that’s been thrown at it.
Bitcoin was a brilliant child from birth, and it has acquired more gifts throughout its short lifespan as the result of careful development. But the biggest change needed to make Bitcoin successful wasn’t in the code: it was in our minds.
In words attributed (wrongly) to Gandhi: First they ignore you. Then they ridicule you. And then they attack you. And then they build monuments to you.
Bitcoin doesn’t need a statue: in twelve years it has transformed the world, and it’s not even a teenager. As more banks break cover — either on purpose or inadvertently — let’s raise our glasses to another year of success and growth for Bitcoin: money’s precocious prodigy.