Johann Palychata, a research analyst with BNP Paribas Securities Service designed two different scenarios for the future of the blockchain and bitcoin. He also noted the ongoing success of the digital currency.

Palychata published his observations in Quintessence magazine edited and printed by BNP Paribas. He introduced his readers to bitcoin and put forward two different scenarios for the further development of bitcoin and the blockchain.

“The first scenario creates a total disruption. In its purest form, a distributed blockchain system allows all market participants direct access to the DSD (Decentralised Securities Depositary), to the exchange and to the post trade infrastructure (clearing & settlement). If this setup develops then existing industry players might be redundant.”

Second scenario looks more promising to Palychata:

“The second scenario is an integration within the post trade ecosystem. The distributed ledger might only be the next generation of IT infrastructure. In this scenario custodians or settlement infrastructures might use the blockchain to record the ownership and trades between themselves; however end investors will still need to use a custodian to have access to the market. The ledger will only be accessible to authorised market participants.”

After expressing his hopes of the blockchain privatisation, BNP Paribas analyst noted that bitcoin is doing well so far.

“Bitcoin has solved a technical challenge and the currency it hosts has been successful so far,” says Palychata in the final part of his article.

BNP Paribas is one of the largest banks in the world. Until this year, it did not demonstrate any significant interest towards bitcoin. There were some rumours about the the blockchain application development during BNP Paribas hackathon organised by the bank in June, but later those rumours were not confirmed.

BNP Paribas competitors are examining uses and abuses of bitcoin technology. As CoinFox reported earlier, Citigroup allegedly set up three experimental systems based on the blockchain technology. They are still at a “pre-production” level and not deployed for the banking operations yet. The Citigroup’s own digital currency Citicoin has the same status.