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After incidents with companies Uber and Paypal in Colombia, we have seen more and more declarations from bankers about Bitcoin. This time it’s Efrain Forero–C.E.O of Davivienda, one of the most important banks in the country with 7.3 million customers in a country of 50 million of inhabitants–who was interviewed by local newspaper El Espectador on August 16th, 2015. In the interview, he takes a strong position against Bitcoin, saying the coin “does not have an owner and we don’t know where to turn to when things get complicated.” A silly paraphrasing of the recent concept from FED about Bitcoin for bankers.
While world-class banks like BBVA are active players in the development of technologies and businesses related to Bitcoin, Forero says: “We are not interested in working (with bitcoins) with our customers or to provide banking operations.” Journalist Sergio Gonzales asked: “Are we facing something like what happened with Uber, only banking-related?” Forero argues that Bitcoin is outside the concept of currencies backed on gold reserves, despite the fact that neither USD nor COP (Colombian Peso) are gold-backed, and says that “[companies like] PayPal, Apple, Samsung and Google that let (their users) make payments” can promote “major crashes (of the market) or promote Ponzi schemes.”
On the other hand, Forero asks for Colombian Central Bank intervention to “be an active promoter of the elimination of physical money.” Could those declarations be a clear request for Colombia to implement models like the ones from Ecuador and Bolivia–where the government created a centralized digital currency and every competitor is forbidden–or just the prohibition of every unauthorized electronic payment competitor? In the interview, the banker explains that physical money is problematic because they pay 1.5 COP per every 1000 COP printed, but the average price of one electronic transaction is 8757 COP. Then is the current electronic commerce Mr. Forero proposes for Colombia really better than the printed money system?
In theory, Davivienda is one of the bannermen of the “use of technology” in the banking sector. Its battle horse is Daviplata, an SMS messaging service that only works on phones sold by Tigo and Claro as part of an archaic program called “Live you Sim,” in which you can spend a previously-deposited amount on things like cabs and phone minutes. I use this system, myself, and while it’s much better than conventional banking services, it’s very limited when it comes to fees. It runs on a very insecure and unstable app (with the possibility of losing all your money if there are any glitches) and with the worst costumer service in the whole banking sector in Colombia.
On the other side of the coin, BBVA is moving fast in order to become the future leader in digital currency, spending up to 35 million on firing executives in a search to renew its management, investing in companies like Coinbase, organizing events related to Bitcoin, and now having companies like Bitnexo and Bitso as finalists in its Open Talent contest. This leads us to wonder if characters like Mr. Forero will demand regulation of the activities of BBVA, or if (on the contrary) Davivienda will become nothing but a paragraph in Colombian banking history, as it is the Grupo Grancolombiano.
On a personal note, I think the banking sector may work well with cryptocurrencies if there are communication channels between the two. Out of this relationship could come products and services that benefit both the banking sector and the general population. It could also cause the rise of competition among banking services providers, which would help improve economic conditions in Colombia through dynamic e-commerce. Some big players like BBVA, Grupo Aval and Colpatria CEO Santiago Perdom have already seen this, while others like Davivienda sleep on laurels showing a complete ignorance of current reality like some sort of real-life Montgomery Burns. Luckily, Mr. Forero works for Davivienda, because if he worked for BBVA, he would’ve been fired already.
While world-class banks like BBVA are active players in the development of technologies and businesses related to Bitcoin, Forero says: “We are not interested in working (with bitcoins) with our customers or to provide banking operations.” Journalist Sergio Gonzales asked: “Are we facing something like what happened with Uber, only banking-related?” Forero argues that Bitcoin is outside the concept of currencies backed on gold reserves, despite the fact that neither USD nor COP (Colombian Peso) are gold-backed, and says that “[companies like] PayPal, Apple, Samsung and Google that let (their users) make payments” can promote “major crashes (of the market) or promote Ponzi schemes.”
On the other hand, Forero asks for Colombian Central Bank intervention to “be an active promoter of the elimination of physical money.” Could those declarations be a clear request for Colombia to implement models like the ones from Ecuador and Bolivia–where the government created a centralized digital currency and every competitor is forbidden–or just the prohibition of every unauthorized electronic payment competitor? In the interview, the banker explains that physical money is problematic because they pay 1.5 COP per every 1000 COP printed, but the average price of one electronic transaction is 8757 COP. Then is the current electronic commerce Mr. Forero proposes for Colombia really better than the printed money system?
In theory, Davivienda is one of the bannermen of the “use of technology” in the banking sector. Its battle horse is Daviplata, an SMS messaging service that only works on phones sold by Tigo and Claro as part of an archaic program called “Live you Sim,” in which you can spend a previously-deposited amount on things like cabs and phone minutes. I use this system, myself, and while it’s much better than conventional banking services, it’s very limited when it comes to fees. It runs on a very insecure and unstable app (with the possibility of losing all your money if there are any glitches) and with the worst costumer service in the whole banking sector in Colombia.
On the other side of the coin, BBVA is moving fast in order to become the future leader in digital currency, spending up to 35 million on firing executives in a search to renew its management, investing in companies like Coinbase, organizing events related to Bitcoin, and now having companies like Bitnexo and Bitso as finalists in its Open Talent contest. This leads us to wonder if characters like Mr. Forero will demand regulation of the activities of BBVA, or if (on the contrary) Davivienda will become nothing but a paragraph in Colombian banking history, as it is the Grupo Grancolombiano.
On a personal note, I think the banking sector may work well with cryptocurrencies if there are communication channels between the two. Out of this relationship could come products and services that benefit both the banking sector and the general population. It could also cause the rise of competition among banking services providers, which would help improve economic conditions in Colombia through dynamic e-commerce. Some big players like BBVA, Grupo Aval and Colpatria CEO Santiago Perdom have already seen this, while others like Davivienda sleep on laurels showing a complete ignorance of current reality like some sort of real-life Montgomery Burns. Luckily, Mr. Forero works for Davivienda, because if he worked for BBVA, he would’ve been fired already.