1 Banking Sector, Disruptive Technology and the Blockchain W A Wijewardena ( waw1949@gmail.com ) Mankind has progressed by shedding old methods and adopting new ones 1 . When these new methods – also called new technologies – disrupt the way in which people had been doing their chores, they are known as disruptive technologies. Since they destroy the old methods, the Austrian-American economist Joseph Schumpeter called them ‘creative destructions’ 2 , a necessity if a society seeks to move forward. A cruel irony about disruptive technologies is that they distribute rewards and punishments objectively to winners and losers, respectively. Thus, winners survive and succeed; losers fail and perish. Hence, what entrepreneurs fear most is the possibility of a disruptive technology emerging and displacing them from business. This fear is equally relevant to bankers as well. The blockchain that was developed as a digital ledger sheet to record transactions relating to the cryptocurrency, Bitcoin, has been one such disruptive technology 3 . It was developed to facilitate peer to peer transactions of Bitcoins without the use of a central authority like a bank, but still ensuring safety, accuracy and disclosure to those involved in the transaction. This is completely different from the way in which banks have been effecting such transactions among different parties. Banks, though they use the modern high technology available to them for providing such financial services, have to function as a central authority guaranteeing the transaction to relevant parties at a fee. In contrast, blockchain does not involve payment of a fee; it is effected by the parties concerned directly by using the Internet facilities. Because of its superiority, it has now been recommended to governments for use in providing government services to citizens. A new blockchain, codenamed govchain has now been developed for this purpose. Govchain is simply a decentralized blockchain-backed platform for the public sector that allows to create forms and simplify procedures related with citizens 1 See, for details how mankind progressed by adopting new methods, Yuval Noah Harari, (2011), Sapiens: A Brief History of Humankind, London: Vintage Books. 2 Schumpeter, Joseph, (1950), Capitalism, Socialism and Democracy, 3 rd Edition, New York: Harper Collins. 3 Patrick Eha, Brian, (2017), How Money Got Free: Bitcoin and the Fight for the Future of Finance, London: One World.