Want to See the Future of Banks? Look at Telcos

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If you want a sneak peek at how DeFi is likely to transform the banking industry, the history of the telecom industry in the U.S. may turn out to be a good guide.

In 1983, the “Bell System” was a national monopoly on telecommunications in the United States. This included voice and data, local and long-distance, and even network equipment. Truly, there were few companies that had more power, prestige or history than AT&T in 1983.

Paul Brody is EY’s global blockchain leader and a CoinDesk columnist.

On Jan. 1, 1984, this monopoly ended. The Bell System, as it was known, was broken apart into its component businesses, igniting one of history’s biggest industry reconfigurations, the final results of which are really only now just playing out.

At first, only small parts of these businesses were exposed to substantial competition – mostly the long-distance business. Over time, however, new technologies such as wireless and Voice Over Internet Protocol (VoIP) started to upend the entire business.