Former CEO of Goldman Sachs bank Lloyd Blankfein believes that regulators will not be able to control the financial system if they allow Bitcoin to develop without their intervention. Thus, the rise in popularity of bitcoin should cause them a state of deep concern, he said in a conversation with CNBC on Monday.
“You don’t know if your payment goes to North Korea, al Qaeda, or the revolutionaries,” Blankfein said. “If I were a regulator, I would be kind of excited about the success of Bitcoin at the present time and prepare to deal with it.”
In order for bitcoin to fit into the existing regulatory and financial system, he said, it is necessary to limit the opportunities it gives its users. At the same time, the ex-CEO of Goldman Sachs doubted that such bitcoin would remain attractive.
“This scenario may work, but it will undermine the freedom and the kind of lack of transparency that people love it for in the first place. Accordingly, this is a difficult situation from which bitcoin will have to get out, ”he added.
Blankfein also questioned the ability of bitcoin to play the role of a store of value, pointing out the high volatility of the exchange rate and the difficulty of self-storage:
“Ultimately, the currency has to do a couple of things. It should be a means of payment and store of value. It is a store of value that can move 10% a day, and if you lose a code or piece of paper, it will be lost forever. ”
On the same day with a statement of a similar plan at the World Economic Forum in Davos spoke Bank of England Governor Andrew Bailey. He argues that none of the existing cryptocurrencies have a suitable model to have a lasting impact on the global financial system.
According to Bailey, existing cryptocurrencies are unable to provide a guarantee of stability in payments. In this regard, he expects users to move more and more away from Bitcoin towards solutions based on fiat currencies. However, he admits that cryptocurrency technology solves a number of problems inherent in the traditional financial system related to the speed and cost of processing payments.
“It all comes down to people needing to have confidence that their payments will be in something of stable value, which, as the lessons of history show, brings us back to fiat currency,” Bailey said.
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