Most Banks Won’t Use Bitcoin, Says Stellar Founder Jed McCaleb

Ripple creator and Stellar founder Jed McCaleb was recently interviewed by Yahoo Finance, where he shared his thoughts on Bitcoin and the cryptocurrency market as a whole.

2018 Crypto Bear Market

There’s no question that 2018 was a brutal year for cryptocurrency value. Bitcoin lost over 80%, Ethereum and Ripple lost over 90% and Stellar Lumens was up there too with nearly 90% of its value lost.

Nevertheless, true crypto enthusiasts have not been shaken out, and are still bullish on the future of this innovative industry.

Take McCaleb, for instance — he told Yahoo Finance that this bear market has not phased him at all. He looks at the overall industry and crypto market cap in a positive light.

“It’s funny when people say crypto is down. In my view, it’s still way way up. It’s down from the peak, but on the whole, it’s way way up. We don’t focus on the price that much, it doesn’t matter to us too much.”

McCaleb then went on to explain how he feels about the evolution of the crypto industry, saying it’s been very interesting and has experienced far more, or at least quicker, growth, than he initially anticipated.

He is somewhat shocked at how hype-driven and speculative the crypto market has become and is hopeful that this “bear market” (though he, personally, doesn’t agree with that term) will change that.

More specifically, McCaleb hopes that 2018’s dip in prices will result in a recalibration of funding in the crypto industry:

“The allocation of capital and resources is wild to watch when these projects that have zero technical merit get millions of dollars. It seems like a big shame… Ninety percent of these projects are B.S. I’m looking forward to that changing.”

Financial Institutions Will Not Use Bitcoin

In addition to providing thoughts on the industry as a whole, McCaleb said something most people involved with Bitcoin and crypto did not want to hear:

“I think it’s true that most financial institutions are not going to use bitcoin.”

McCaleb said this in response to the interviewer’s question of whether banks and financial institutions will create closed, private blockchains for their own use to fit the narrative “blockchain without Bitcoin.”

While he believes financial institutions will not use Bitcoin, he did say that private, permissioned chains will only get you so far, and that you need to have a public network.

“In my mind, what blockchain gives you is a public record that everyone can see, but they can’t change it. So parties can transact even if they don’t know each other. So you still need a public chain. It doesn’t need to be the bitcoin blockchain, but if it’s not a public chain, then you’re missing the point.”

McCaleb believes public blockchains like Bitcoin are vital for banks and financial institutions, but Bitcoin itself will never be used by the banks.

What is Stellar, Really?

McCaleb was then asked about his own project, Stellar Lumens.

He admitted that the majority of people don’t actually understand what Stellar is, and this is largely because he and his team have done a poor job at marketing it. He hopes to change this in 2019 and provide a clearer understanding of what Stellar is.

When asked what Stellar was good at, McCaleb said it’s really good at cross-border payments (for example, remittances) and tokenizing value across the board. Stellar is essentially a universal payments network, adding that Stellar has been tokenizing various assets long before it became trendy with other cryptocurrencies.

He ultimately assured that in 2019 he and his team will show the world a more in-depth look at Stellar, and demonstrate its real potential.

Do you agree with Jed McCaleb that banks and financial institutions won’t use Bitcoin? Do you think they will use Stellar Lumens instead? Let us know what you think in the comment section below.