At a recent IT conference in the UK, John Straw, a Senior Advisor at global management consulting firm McKinsey & Company, issued the following warning: "Blockchain is a 'democracy killer', in many regards."
Straw's comments about blockchain technology came during a keynote speech ("How Business 5.0 is the next generation of business - in the Cloud") he gave at last month's one-day "Cloud and Infrastructure Live" conference in London.
According to a report published earlier today by UK media outlet Computing (which sponsored the aforementioned event), Straw expressed concern that a P2P blockchain-powered payment system could eliminate the need for intermediaries (i.e. the banks):
Let's say that somebody actually does produce a working blockchain peer-to-peer [financial] system. It'll be a lending system that actually scales, we won't need banks any more. So, at that point that we won't need banks... That means we'll have no central clearing houses, which means that they don't exist, and they don't therefore pay tax. So who's going to pay for the NHS?
Computing's articles points out how dependent the UK government is on taxes paid by the financial services sector:
Taxes from the UK's financial services sector, which is overwhelmingly based in London, raised about £75 billion in 2017-18, according to accountants PwC [PDF]. That equates to just under 60 per cent of the £130 billion budget for health and social care in the same financial year.
Straw also added:
Blockchain makes transactions invisible to the taxman. That's why France and Germany have basically banned [Facebook's proposed cryptocurrency] Libra, and quite rightly so. Blockchain is a ‘democracy killer', in many regards.
However, he also talked about his appreciation for smart contract technology:
I believe that this is the fundamental basis of Business 5.0… transaction capabilities within minutes, automatic remittances, no escrow and the fact of the [low] cost of doing it manually, a virtual presence in the cloud - and no lawyers necessary, which is obviously a bit of a joy... That I think is the foundation of Business 5.0 together with APIs.
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