Westpac CEO: Bitcoin and the blockchain are "potentially disruptive"

Brian Hartzer, Managing Director and CEO of Westpac Banking Corp, believes bitcoin and the blockchain as "potentially disruptive" technologies which could be "quite powerful from an efficiency point of view". However, he says there's no need for banks to panic about being cut out from the monetary system because any impact will only come in the long term, reports Australian Financial Review.

"The development of the blockchain [will] certainly [have] a very interesting and potentially disruptive impact on financial services," Mr Hartzer said after being asked about it at the bank's strategy briefing on Monday. But he added that "nobody really knows yet where it is going to go to [and] there are a number of limitations and challenges with it."

The limitations include the number of transactions that can take place on the blockchain (seven a second), the highly volatile bitcoin price, and its potential to be used in dark web marketplace attracting unlawful entities.

Nevertheless, Westpac is "staying close to the idea", Mr Hartzer told AFR.

He pointed to an investment by the bank's venture capital fund Reinventure Group in Coinbase, a San Francisco-based  bitcoin wallet and exchange company and its ongoing experiments with Ripple Labs, which is developing a technology similar to blockchain to facilitate sending and receiving information among banks.

"We are looking at it, we are experimenting with it. I think it is a bit too soon to panic about it. It is potentially quite powerful from an efficiency point of view. It is one of the things we are keeping an eye on."