Financial innovation is the topic of the hour, so it is hardly surprising that banks are being increasingly judged on their capability – and willingness – to implement change.
Mariano Belinky, managing director at Santander InnoVentures, the megabank’s venture capital fund, is familiar with this desire to innovate from within.
But what about innovations, like bitcoin, that take place beyond bank walls? Speaking on a panel at Finextra’s FutureMoney conference, Belinky described how his industry could be “transformed” by distributed ledgers like the blockchain.
The bigger picture
Speaking to CoinDesk, the VC expanded on his perceptions of cryptocurrency technology and why, in his opinion, consumer adoption doesn’t matter just yet.
Though some in the bitcoin space may be watching the currency’s growing transaction volume impatiently, Belinky warned against measuring bitcoin’s worth solely on its popularity as a currency.
“We shouldn’t be focused on the adoption of a digital currency. The underlying technology is a powerful one and I think that we will see adoption of that technology much sooner.”
It’s about looking at the bigger picture, Belinky added. For him, it’s important to explore blockchains and competing technologies to find real-world applications.
“If some of those applications require bitcoin, I am sure that we will end up using bitcoin. But we are not going to use bitcoin for the sake of doing so,” he said
Despite his initial enthusiasm, Belinky also echoed a sentiment now common across traditional financial institutions. That is, bitcoin may have some good applications but it isn’t a panacea capable of eliminating all industry problems. In fact, it might be too destructive for its own good.
He noted:
“Think of bitcoin as a hammer. If you are going to have people walking around with hammers to treat everything as a nail, that’s a problem because you are going to break a lot of things.”
Increasing investment in crypto
Santander is not the only Spanish bank exploring the potential of bitcoin and the wider blockchain ecosystem. Madrid-based Bankinter invested in Coinffeine, a Spanish bitcoin exchange, in November last year.
At the time, the bank said its investment, made through the Bankinter Innovation Foundation, was one of the first in the bitcoin space.
Belinky’s comments also come amid additional interest and investment from other corporations outside the crypto sector.
Orange Silicon Valley, the San Francisco division of the telecommunications giant announced plans to invest up to $20,000 in blockchain startups earlier this month.
Solutions for real problems
According to its website, Santander’s $100m fund, headed by Belinky, is an attempt to get closer to the “wave of disruptive innovation in the FinTech space”.
The initiative, which provides funding and mentoring, currently has two mobile payments and one software startup in its portfolio.
When asked what it would take for Santander to support a crypto startup, Belinky said:
“It would take us identifying a crypto startup that solves a real problem for our customers. We don’t have very many customers that are trying to figure out a way to hold their bitcoin.”