The president and CEO of GMP Capital, Harris Fricker, says blockchain technology is the next step in the evolution of the internet and his company is ready to embrace the disruption.
Speaking on Monday to BNN’s Catherine Murray, Fricker said the revolution about to take place is inevitable, since, through the development of distributed ledgers, blockchain and cryptocurrencies that are able to do what the banks and governments do (legitimize the transfer of wealth) without actually needing a bank or government to play a role.
“To me, the attraction is completely logical, it’s the evolution of the Internet,” says Fricker. “Think of the international remittance market, that’s a four trillion dollar market. You’ve got four and five day delays for the nanny from the Philippines working in Toronto to send some money home to her mom in Manilla, and it’s costing her in some instances ten per cent of the amount she’s sending,” he added.
“We’ve got over 30 per cent of the world’s population not part of the banking system. It’s too expensive,” says Fricker. “The distributed ledger will change this.”
Last week, GMP announced the launch of a blockchain-dedicated team of investment banking and research professionals which will be helping its investors to capitalize on the new technology.
Fricker says the move is right for GMP, since the company is poised for a major disruption in the financial industry. “We don’t have any vested interest in the current system,” says Fricker. “We don’t get paid to process payments and we don’t have central databases. We believe in the power of disruption, we believe that wealth creation occurs where there’s disruption.”
At the same time, Fricker says that from a regulatory point of view, Canada needs to step up to the plate when it comes to blockchain, by allowing investors and capital more freedom to support innovation in the industry.
“The great news is that this is a profound opportunity for Canada. This is clearly an example where we can be a world leader — if we get it right,” says Fricker. “What’s wrong with [our] system is that it’s increasingly not able to provide capital to the small-to-mid cap market, which is where all of these new blockchain, cryptocurrency opportunities are occurring.”
Earlier this month, GMP led a syndicate of underwriters in a $30-million bought deal for Vancouver-based HIVE Blockchain Technologies Ltd., a cryptocurrency mining company which just recently completed an agreement with Iceland’s Genesis Mining Ltd. to operate its large digital mining data centre in Reykjanes, Iceland. The data centre is the company’s second in Iceland.
In a sign that even the banks are ready to join the rush to blockchain, the Royal Bank of Canada (RBC) revealed last week that it is experimenting with the use of blockchain to move payments between Canadian and US banks. The company said that it’s been developing the new system over the past six months and hopes that it will improve the speed of payments and lower costs.
“Everybody recognizes blockchain will be transformative and critical,” said Martin Wildberger, RBC’s executive vice president for innovation and technology, to Reuters. “At the same point in time, I think everybody recognizes these are early days.”