CEO of Goldman Sachs Lloyd Blankfein espoused his shrewd views of cryptocurrencies yesterday, whilst speaking at the Economic Club of New York, insisting that it was impossible to tell where the technology would be twenty years from now.
Blankfein, who has been CEO of Goldman Sachs since 2006, does not own any bitcoin. However, he has also admitted he has been wrong about things in the past and that it was impossible to tell what kind of value cryptocurrencies might hold in future.
Elaborating on this, Blankfein explained how commodity currencies in the past – i.e. gold and silver – were slowly phased out and replaced by commodity-backed fiat; non-precious paper and coins, which served as a representation of the gold and silver governments had in their vaults. Later, after the end of the gold standard in the 1970s, fiat was floated – value became based entirely on trust in the system.
Relating this to crypto, Blankfein said,
“If you could go through that fiat currency where they say this is worth what it’s worth because I, the government, says it is, why couldn’t you have a consensus currency?”
Blankfein presents a measured view which hasn’t been always seen in his field; Wall Street’s large firms have generally been slow to warm up to cryptocurrencies. Jamie Dimon, CEO of JP Morgan has become infamous for his dismissal of bitcoin as a fraud, and “worse than tulips.” But Blankfein sees this outright rejection of crypto as far too arrogant.
“I’m not in this school of saying… because it’s uncomfortable with me, because it’s unfamiliar, this can’t happen, that’s too arrogant,”
Blankfein said nevertheless, crypto at this time was not for him, but that if it proved to endure into the future it would be possible to trace why.
“So it’s not for me, I don’t do it, I own no bitcoin. Goldman Sachs as far as I know… has no bitcoin, but if it does work out, I could give you the historical path why that could have happened.”
Goldman Sachs has been on the fence about cryptocurrencies until recently when the firm announced it had plans to open a crypto-trading desk. Many have speculated that until regulation surrounding crypto is settled, larger firms will wait before they enter the space. However, as firms compete with one another, more may start to enter the space in a bid to bring crypto customers on board.
Image Source: “Flickr”