Ethereum Turns To The Dark Side - The Banks' Bloodless Crypto-Coup

Mar. 03, 2017 2:03 PM ETACN, BBVA, BK, BP, CS, CSCO, JPM, SAN, TRI, UBS, TRI:CA17 Comments
Kurt Dew profile picture
Kurt Dew


  • Ethereum, once the darling of Fintech, has fallen on hard times.
  • And, confused and disappointed by mistakes, Ethereum fell in with a tough crowd. The banks.
  • Enter the newest shiny blockchain thing: The Enterprise Ethereum Alliance.
  • More to come.

Careful who you hang with, 'cause trust is a really big word you know.

-- Ayo Nation

Poor pathetic Ethereum. It's the cryptocurrency that has lost its way. And now it's fallen in with a bad crowd. Here begins a chronicle of Ethereum's decent into cryptocurrency hell, where the bank dealers will use it like a worn-out dishrag.

Once Ethereum was the smarter, younger, brother of the black sheep of the cryptocurrency family: Bitcoin - the largest cryptocurrency by volume. But Ethereum has fallen on hard times. The banks, however, are triumphant. They have done the once unthinkable. They have bloodlessly captured their first public cryptocurrency.

This story provides the skinny behind the little-noticed dalliance between Ethereum and a consortium of banks and like-minded behemoths, which calls itself the Enterprise Ethereum Alliance. Members include Accenture (ACN), BBVA (BBVA), BNY Mellon (BK), BNP Paribas (BNP), BP (BP), Cisco (CSCO), Credit Suisse (CS), ING (INGA), Thomson Reuters (TRI), UBS (UBS), J.P. Morgan Chase (JPM), and Banco Santander (SAN).

The failed Ethereum plan. The geeks who write Ethereum code sought, in vain, to be ruled by machines. You want that if you are a geek. Having failed to achieve their misbegotten vision of utopia, Ethereum mavens have found the next best thing. They will be ruled instead by the dealer banks.

But the brave new world that once was Ethereum lost its credibility as a cryptocurrency; and finally had no alternative but to become a captive of the dealer banks.

The bankers' fear. The dealer banks view cryptocurrencies as an existential threat, the negative motive for their deepening involvement with the technology. But on the positive side, they - and financial regulators as well - see the possibility that there may be ways the traditional function of banks - providers of trust - can remain, through cooperation in some ways with the Bitcoin technology, which makes

This article was written by

Kurt Dew profile picture
My primary interest is financial market structure. I write about market platforms, index instruments, and exchange management firms primarily. I was a member of the team that introduced index trading at the CME. Later, I pioneered the secondary market trading of OTC interest rate swaps.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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