Acting currency director Brian Brooks predicts that decentralized finance will make financial services of many banks obsolete, just as email disrupted postal services.
In an interview with DC Fintech Week on October 19, Brooks predicted a near-term future mediated by financial services with distributed reserve technology, overshadowing the historical role of the old banking sector as “custodian of the central ledger.”
“We […] see a future in which decentralization is likely to become an irresistible force. By definition, decentralized networks are cheaper, faster and more flexible than any centralized structure. ”
Brooks previously served as Head of Legal at Coinbase and is now Head of Banking Supervision at the Treasury. Compare the historical function of a financial institution as a fundraiser and the role of the post office as a message collector, and note: “With email, we no longer need to collect money — we can do it directly with each other.”
Asked about the role banks will play in society in the face of growing creative disruption such as stable currencies and DeFi, Brooks said, “People need financial services, they don’t need banks.”
“You can go online and say, ‘Hey, I have $ 10,000 here and I want to earn five percent […] and the algorithm will find someone who does it, and suddenly he loses value in the bank that invests all the money together. ”
Brooks predicts that banks will continue to provide a range of key services, including “physical asset protection” and “lending facilities.”
He also predicts that banks will adapt to an increasingly decentralized world, and he predicts a future in which banks and corporations will work to connect nodes in blockchain networks and where banks will mint their pile of coins.