An early bitcoin pioneer predicts how the blockchain will change banking

A longtime developer in the cryptocurrency world predicts its technology will change global payments, fundraising and stock markets in the near future.

Jed McCaleb has had a hand in some of the biggest crypto organizations to date, beginning with the Mt. Gox Bitcoin exchange. McCaleb is now chief technology officer at Stellar, which is focused on developing a cryptocurrency network for cross-border payments. On Wednesday, he shared his views with on how cryptocurrency and the underlying blockchain technology will likely gain traction in the years to come.

“In the future, I think it’s pretty clear to me there will be a universal payments network that will operate,” McCaleb said. That will involve a “public ledger that people can see and can’t change arbitrarily” and letting people “use things they’re used to, like dollars and euros.”

Coincidentally, Stellar is working to solve those very issues. The network claims transaction settlement times of about 5 seconds or less — a fraction of Bitcoin‘s — and allows users to quickly exchange government-backed currencies such as the U.S. dollar and the euro. IBM is already using Stellar’s network to develop a cross-border payments system with some large banks.

Second, McCaleb said the phenomenon of token sales known as initial coin offerings show entire “markets not tapped right now by the financial system.”

Initial coin offerings have raised the equivalent of nearly $9 billion in just over four years, according to financial research firm Autonomous Next.

The influx of funds into initial coin offerings has also spurred the growth of many fraudulent fundraisers, drawing the attention of regulators. But proponents say the token sales represent a new model for fundraising.

In contrast to the traditional model of projects courting venture capital, token sales generally go directly to retail investors who can contribute to a project by buying digital coins. These tokens can give investors access to a future platform, or at least appreciate in value.

Finally, McCaleb expects that non-cryptoassets such as stocks will become digitized with the same technology.

“In the next 10 years I wouldn’t be surprised if all equity isn’t tokenized on some blockchain somewhere,” he said. That may involve decentralized exchanges since McCaleb thinks people will want to trade so many things it will be hard for a centrally controlled exchange to handle.

Several start-ups are already working on ways to connect the world of digital tokens to traditional financial markets. For example, Maryland-based Securrency is working to allow investors to buy stocks with Bitcoin.

McCaleb created the Mt. Gox Bitcoin exchange before selling it in 2011 to Mark Karpeles, under whom the exchange was hacked and eventually filed for bankruptcy. McCaleb went on to co-found Ripple, whose XRP coin is now the third largest by market capitalization. After a falling out with the Ripple team, McCaleb co-founded Stellar in 2014 and is now chief technology officer.

Stellar’s XLM coins, known as lumens, soared into the 10 largest cryptocurrencies by market capitalization around New Year’s. It has since sold off with the market, down about 34 percent for the year so far at 23.8 cents.

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