Boyd Stacey

Predicting how disruptive technologies evolve is not easy. Back in the late nineties, Napster shook the music industry by creating a platform where users around the world could exchange music in an mp3 format. The business model combined two innovations, the internet and digital music. Bitcoin, like Napster, is an evolution from a closed distribution network to quick and seamless open source environment and like Napster faces strong regulatory and legal headwinds. Although, large-scale adoption of virtual currency is unlikely in the immediate future, migration towards a regulated and secure virtual currency network is inescapable.

Today we believe the evolution in virtual and digital currencies will be similar to that of ITunes. The successful virtual currencies will strike a balance between convenience and compliance. Trust in the U.S. dollar comes from the strength of the economy and its institutions. Would people trust a currency that is backed by a private entity or an unknown developer? Would the average person
hold its savings in a digital wallet rather than a bank account that is insured by a deposit guarantee fund? Who will be accountable for a failure in the systems that create the digital currencies?

Nathaniel Karp, U.S. Chief Economist and Director of Economic Research for BBVA Compass, will discuss the challenges and opportunities a virtual currency poses for regulators and financial institutions.