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Not If, But When: Treasurers Must Prepare for Blockchain

May 26, 2016
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Jeff Glenzer CTP, Vice President and Chief Operating Officer, AFP

I’m a treasury guy.

I cut my teeth on cash management, bank relationship management, payments, and corporate investing – the basic tasks for practically every treasury professional.

I roll my eyes at the latest business buzzwords. Today’s “disruptive” and “disintermediated” are yesterday’s “visionary” and “synergy.” Treasury basics are treasury basics, no matter what’s new and trendy.

So when I say treasury professionals need to pay attention to something as cutting-edge as blockchain technology, that’s not just me jumping on the latest bandwagon. Blockchain really is going to be a game-changer for treasury.

Here’s why. Blockchain technology has the potential to render our current payments system completely obsolete. Think I just drunk the fintech Kool-Aid? Then regulators the world over, including the Federal Reserve, FinCEN and the European Central Bank, just took a big gulp too. They’re actively studying blockchain technology to understand how to regulate it, even how to think about it. Whether they want to regulate blockchain so they can tax it—as some wags suggest—or to ensure that bad guys don’t rule the roost is almost beside the point. If global finance regulators regulate blockchain, then it will be a legitimate form of settlement or payment.

Banks are looking at blockchain too. According to The Wall Street Journal, Bank of America alone has applied for at least 11 cryptocurrency patents since 2013, “including methods for finding suspicious users on a blockchain.” Obviously banks don’t want to get left behind once regulators legitimize blockchain technology and they want their own version to offer customers—including you.

If two of the three legs of the finance chair are serious about blockchain—banks and regulators—then customers like treasurers should be too. I think about it this way: How will you respond if your boss or the board asks, “What are we doing about blockchain?” Your answer should not be: “What’s that?”

Treasurers sometimes get so caught up in their day-to-day tasks like cash management and investing that they forget to look ahead. It’s hard, but in the case of blockchain it’s very necessary. You need to study it and figure out how it will be a part of your organization’s future.

I believe it’s only a matter of time.

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