Westpac is experimenting with Bitcoin and blockchain
Westpac's CEO, Brian Hartzer, has described Bitcoin and the blockchain as "potentially disruptive" technologies, but said that any major change in the monetary landscape caused by these technologies, which might cut out the need for banks, will only be a long-term development that banks do not need to panic about; despite this, he said that his bank is experimenting with the technology.
Westpac Banking Corp chief Brian Hartzer describes bitcoin and the blockchain as "potentially disruptive" technologies which could be "quite powerful from an efficiency point of view" but says there's no need for banks to panic about being cut out from the monetary system because any impact will only come in the long term.

The blockchain is technology that validates transactions made in bitcoin, digital money that is not controlled by any bank or government, but rather by an open network managed by its users. If it ever takes off, bitcoin could transform the movement of money and strip banks of their control of it.

Westpac is watching the development of bitcoin and has invested in Coinbase. Credit: George Frey

"The development of the blockchain [will] certainly [have] a very interesting and potentially disruptive impact on financial services," Mr Hartzer said after being asked about it at the bank's strategy briefing on Monday. But he added that "nobody really knows yet where it is going to go to [and] there are a number of limitations and challenges with it."

These include limits on the number of transactions that can take place on the blockchain (seven a second), the highly volatile price of bitcoin itself, and its attraction of criminals. Nevertheless, Westpac is "staying close to the idea", Mr Hartzer said.