Lloyd Blankfein, the former CEO of Goldman Sachs, thinks regulators are asleep. Instead, they need to 'hyperventilate' due to the recent success of Bitcoin. He stresses that the cryptocurrency is directly opposite the current financial system.
The success of Bitcoin
That's what Blankfein says during Squawk Box at newschannel CNBC. As a former chairman of the US investment bank, he closely follows the developments of Bitcoin.
According to him, the pseudonym about Bitcoin is perfect for money laundering He describes it with the following words: "You do not know if the North Koreans, or Al-Qaeda, or the Revolutionary Guard is making a payment."
He wonders how it is possible for US regulators to allow the cryptocurrency to flourish, when in fact they pose a danger. It stresses the importance of anti-money laundering and terrorist financing legislation.
"As a regulator, I would hyperventilate about the success of Bitcoin, and I would arm myself to deal with it."
He advocates limiting the "fundamental freedoms" that Bitcoin allows. If the pseudonymly privacy-friendly nature disappears, so will the strong demand for Bitcoin, is his reasoning.
"This could potentially work, but it will undermine the freedom and lack of transparency that attracts people. So that's the conundrum that Bitcoin has to overcome first."
Moreover, recent research by Chainalysis showed that only 0.34% of all Bitcoin transactions can be linked back to criminal activity, mainly involving relatively harmless ransomware.
Criticism of the cryptocurrency
As befits an 'old banker', the criticism of Bitcoin goes even further. He strongly questions the aspect of 'store of value', also known as the property as a potting agent.
Blankfein stresses that the price volatility and complexity of keeping the cryptocurrency in-house, make Bitcoin a bad saver.
"It's a potting agent whose value can change 10% per day, and that if you lose the code or if you lose the piece of paper, it's lost forever. Or if someone takes it from you, how do you know?"
All in all, little positive comes out of the banker's mouth, as can also be seen in the video below:
At the same time, there are more and more banks around the world that are seeing that they better embrace Bitcoin. For example, in a lot of places there are 'custody services' from the ground.