An extraordinary thing is happening to money which can be called a money creation paradox. Started as a privilege of the few, ability to create a promise of value (which money inherently is) is becoming accessible to an increasing of the population.

The world economy is maintained by faith in money

For centuries it was the norm that only the King or the Government had the right to issue native currency which had to be accepted as a legal tender by residents. At first, issued coins were backed by a physical commodity, usually gold which in theory could be exchanged by the bearer of the banknote. The system was conveniently named the Gold standard.

In 1993 however, the U.S. decided to drop the Gold standard and broke dollar’s connection to the precious commodity. There are numerous reasons named why did the United States decided to go through with the idea but the one which is widely agreed upon was to get out of the Great Depression. The U.S. economy was collapsing at that moment, people were losing jobs, and the industries were stagnating. Saying goodbye to the Gold standard enabled the government to pump up the financial system by issuing extra money and organizing State-financed social projects to get the economy rolling again. Other countries pegged their currencies to the dollar instead of gold, and that’s how the world began transitioning to a free-floating exchange rate dominated system with the dollar as the de facto world currency. Since then coins were no longer backed by physical goods, but the trust in the issuing authority and the underlying economic infrastructure. Money validity became a matter of faith.

Lately, faith is crumbling

Over decades there was no shortage of scandalous news surrounding banking. Soliciting money laundering, defrauding bank customers, misinformation, insider trading, market manipulation were always in the background. It does not matter whether we are talking about large central banks with monetary power to shape economies or small regional lending establishments. When so much such capital and power is concentrated at an institutional level, it’s hard to expect that no external pressures would try to bend the system one way or the other. In the end, banking is a power game.

Last financial crisis of 2008 and especially the way it was dealt with has caused a lot of displeasure with the general public. There was a lack of accountability for the actions that caused a lot of people to lose money, savings, and investments.

High inefficiencies on cross-border transactions, low levels of innovation, increasing inflation due to techniques with sophisticated names like quantitative easing and the failure to foresee and circumvent these events made so that a significant minority of people started losing trust in how we transact value in our societies.

People started creating money by themselves

What Satoshi Nakamoto started with the creation of Bitcoin is hard to evaluate yet as the phenomena is still somewhat underdeveloped. But the major trend was set: from now on, anyone can program and establish a money system using computer code and cryptography. What is more, one can do it in a decentralized way so that no entity can influence the system or in other words corrupt it.

And heck, people started doing that. There are more than 1,500 cryptocurrencies and tokens which are functional in the newly forming asset class of cryptocurrencies. According to K. Siegel, the CEO of Pillar tokens and cryptocurrencies are a belief in a value system — if you’re able to get people to accept your coins for resources, there’s value in them even it may not be associated with the amount of production.

In a sense, people have started to overstep banks where they can. It should not be forgotten or overlooked that current financial system is a dinosaur of unimaginable proportions. This enormous focused power is not moving to the shadows willingly, believe that. On the other hand, cryptocurrencies have raised so much public awareness during the last 12 months, that even large institutional banks and hedge funds started debating whether to enter the space.

Retail banks changing the face

Millennials see traditional brick-and-mortar bank branches as retired old people. They’ve been here the longest, have the majority of the money and are in desperate need of fresh blood to revamp the space. With increasing influence people assert to technology in their daily lives, it’s natural they want the ability to access and manage money in an effortless user-friendly way.

Having been asleep at the wheel, retail banks are moving to embrace upcoming changes. A growing amount of renowned banking institutions are developing digital apps for portfolio tracking and everyday banking.

According to PwC Global Fintech report for 2017, 77% of financial institutions expect to increase internal innovation efforts in the upcoming 5 years. Sadly, innovation is a tricky thing usually easier said than done. Banks have limited experience in developing digital consumer applications which makes them more likely to foster partnerships with Fintech companies.

Fintechs in contrast, are as a trendy topic as they get. New startups are joining the space every month, cumulative investments raised are touching the sky, and an ever-escalating number of IT-related jobs are penetrating the financial industry. Banking is slowly becoming the game of the tech geeks. Based on data coming from PWC’s DeNovo platform, investments into Fintech companies has grown by a 41% on a yearly basis during the last four years.

Meanwhile, cryptocurrencies are introducing people to the decentralized systems of value, Fintech startups are ready to fill in the space to bridge conventional banking people are used to with the evolving industry of cryptocurrencies.

ORCA Alliance is a good example. ORCA is building an open banking platform for easy money management online. ORCA app will allow users to chose banking services they want from any of the European banks without the need to physically appear in the bank branch.

Users will be able to sync their money accounts with cryptocurrency wallets and exchanges in one application to initiate all kinds of payments directly through the platform.

Open Banking allows us to gather data on all financial services available on the market and provide it to our users in a convenient way. The ability to instantly compare prices, offerings and quality of service will enable our users to make informed choices how to go about handling their money.

Another issue we are putting the extra time to solve with ORCA is the ability to make split-second withdrawals from crypto exchanges to bank accounts. It is one of the hot topics the crypto community is craving for.

Projects like ORCA and other payment-processing startups, Open Banking platforms and service aggregator apps coming to the market are orienting themselves to be the middle step between traditional banks that people are familiar with and trust, and the new generation digital applications. If these newly-formed companies can guarantee fund safety and the protection of client data, we might very well witness the disruption of banking, an industry which historically favored conservatism and tradition.

ORCA is whitelisting — jump on board. Enlist at www.orcaalliance.eu