Goldman Sachs CEO Lloyd Blankfein has revealed his thoughts on bitcoin saying he was undecided about the cryptocurrency. Blankfein made the statement in a tweet yesterday, in which he also compared the move into cryptocurrencies to the transition from gold to bank issued notes.
Still thinking about #Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.
— Lloyd Blankfein (@lloydblankfein) October 3, 2017
Goldman Sachs had recently hinted at plans to set up operations focused on digital currencies.
His position aligns with Morgan Stanley CEO who sees cryptocurrencies as more than a fad. Jamie Dimon, JP Morgan CEO had last month called the cryptocurrency a fraud. Billionaire hedge fund manager Ray Dalio was of the opinion cryptocurrencies were being hindered by a lack of real world applications.
Why banks are interested in cryptocurrencies
Bitcoin and other cryptocurrencies represent both a threat and investment opportunity. As more people adopt digital currencies, banks which were hitherto the middle party, would have fewer transactions, leading to lower income. Wealthy clients on the other hand have put pressure on the banks to create funds and other vehicles through which they can invest in them. Banks have also invested in blockchain which is the technology on which cryptocurrencies run in order to lower their transaction costs.
Reactions by countries towards digital currencies have been varied. White China has essentially banned its citizens from participating, Russian universities have allowed courses on cryptocurrencies and blockchain technology to be taught in its universities. African countries have also taken a cautious approach. Nigeria’s Central Bank of Nigeria (CBN) as set up a committee to study cryptocurrencies and advice the government accordingly. Several exchanges are currently running in the country.
Goldman Sachs is an American multinational finance company that engages in investment banking, investment management, securities trading and other financial services. The bank is the 5th largest bank in the United States by asset size with over $800 billion in assets.